UCG Unicredit Spa

UNICREDIT

CEO Agrees to Quit

The chief executive of UniCredit SpA, Italy's largest bank, has agreed to step down, clearing the way for the board to begin a search for his successor.

UniCredit said CEO Federico Ghizzoni will step down once a new chief executive is found, to ensure a smooth transition.

Speculation about the future of Mr. Ghizzoni, who became chief executive in 2010, has been mounting for months, as investors pummeled the bank's stock and major shareholders grew increasingly convinced that new leadership was needed to restore confidence.

People familiar with the situation said the board is seeking an outsider who can spearhead a capital increase. Some said UniCredit needs to raise as much as EUR9 billion ($10.1 billion) in fresh funds. Those funds could come from a rights issue, asset sales or both, they said. The bank has about EUR80 billion in bad loans, more than any other bank in Europe.

Moreover, investors have grown increasingly concerned the bank's capital cushion is too thin. UniCredit, which is the only systemically important bank in Italy under new international guidelines, has reported its core capital dropped during the first quarter.

Mr. Ghizzoni came under particular criticism for the bank's decision to underwrite the EUR1.5 billion capital increase of Banca Popolare di Vicenza SpA. Earlier this spring, regulators grew concerned investor sentiment toward Italian banking stocks was so poor that the capital increase could fail, leaving UniCredit owning the troubled bank. As a result, the government stepped in and organized a fund supported by Italian financial institutions to take over the transaction.

UniCredit's shares have lost more than 40% since the start of the year. In recent days, it has risen on expectations of Mr. Ghizzoni's resignation. In Tuesday's trading in Milan, the stock rose 4.9%.

--Deborah Ball

IPO MARKET

Food Firm Seeks Up to $500 Million

A Chinese food company known for its spicy dried-duck snacks plans an initial public offering in Hong Kong.

Zhouheiya Food Co. is expected to file an application for a Hong Kong listing in the next couple of weeks, looking to raise up to US$500 million, said people familiar with the matter.

Zhouheiya, which sells dried-duck heads and necks among other snacks, could be the first food company to go public in Hong Kong this year.

Chinese private snack-and-beverage group Dali Foods Group raised US$1.15 billion in November in the sector's biggest IPO last year, according to Dealogic. Dali Foods is currently trading around 20% below its IPO price.

WH Group Ltd.'s US$2.4 billion float in July 2014 is the biggest food-and-beverage sector IPO on record in Hong Kong, Dealogic data show.

Founded in 2006, Zhouheiya has chain stores and factories in more than 10 cities in China, with online shops on Chinese e-commerce sites such as Alibaba's Tmall and JD.com. It recorded a net profit of 306 million yuan ($46.7 million) in 2015, according to data from China's company-registration website. Its investors include Shenzhen private-equity firm Tiantu Capital.

Credit Suisse Group AG and Morgan Stanley are sponsors, or banks responsible for the IPO, the people said.

--Alec Macfarlane, Kane Wu

(END) Dow Jones Newswires

May 25, 2016 02:47 ET (06:47 GMT)

Unicredit (BIT:UCG)
Historical Stock Chart
From Mar 2024 to Apr 2024

Unicredit (BIT:UCG)
Historical Stock Chart
From Apr 2023 to Apr 2024