October 23, 2017 / 9:38 AM / 10 months ago

CORRECTED-Carige's bondholders approve mandatory debt conversion

(Corrects to read “debt conversion”, headline, paragraph 1)

MILAN, Oct 23 (Reuters) - Banca Carige said on Monday bondholders had voted to make mandatory a debt conversion as part of the Italian bank’s fundraising efforts.

Carige had proposed swapping four of its junior bonds into senior-ranking debt, looking to reap a capital gain in the conversion.

The move is part of a broader capital raising plan which hinges on a new share issue for up to 560 million euros ($658 million) to be launched next month.

After the swap offer was taken up by a majority of bondholders, the conversion became mandatory for all holders of that debt following a favourable vote at meetings held on Saturday, Carige said in a statement.

After Rome rescued larger rival Monte dei Paschi di Siena and liquidated two failing regional banks this year, Carige came into focus as the last large Italian bank still in difficulty following a deep recession.

The European Central Bank has given Italy’s ninth-largest bank until the end of December to strengthen its capital.

$1 = 0.8512 euros Reporting by Valentina Za; editing by Jason Neely

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