View this article online: https://www.insurancejournal.com/news/international/2014/10/28/344939.htm
Banca Carige SpA, one of the two Italian lenders that need to plug a capital shortfall after the European Central Bank’s review, agreed to sell its two insurance units to Apollo Management Holdings LP.
Carige will sell Carige Assicurazioni SpA and Carige Vita Nuova SpA to Apollo for 310 million euros ($394 million) in cash, the Genoa-based lender said in a statement. The bank also signed an agreement with Apollo, the private-equity firm run by Leon Black, to keep selling insurance products through its network.
Carige is selling the units as part of a plan to restore profitability and strengthen finances after Italian regulators requested it to increase its buffers. Carige must replenish about 810 million euros of capital after taking into account funds raised this year, the ECB determined in its comprehensive assessment.
The bank will seek to raise 500 million euros in a rights offer to fill that gap, it said Oct. 26.
The stock rose as much as 7.3 percent and was up 4.4 percent to 8.05 cents as of 9:50 a.m. in Milan. Yesterday the shares declined 17 percent to a record low.