Libya to raise UniCredit stake to 5 pct-cbank chief

Former colony Libya has taken a 4.23 percent in Italy’s second-biggest bank and promised to give as much as 500 million euros ($673.5 million) to its planned capital increase, which was announced in a policy U-turn on Oct. 5.

“At this time, we are the second (biggest) shareholder. And we want to stay as such. Today we have 4.23 percent of the shares. We will continue to buy until we reach a total of 5 percent,” Libyan Central Bank Governor Farhat Omar Bin Guidara told Italy’s Il Messaggero paper in its Saturday issue.

“And let it be clear, our actions are specifically economic and financial, there are no political considerations.”

Any investment of more than 5 percent in an Italian bank needs the approval of the Bank of Italy.

The Central Bank of Libya said on Thursday that it, the Libyan Investment Authority and Libyan Foreign Bank had bought 3.67 percent of UniCredit. The purchase added to 0.56 percent held since 1997 by the Libyan Foreign Bank.

Bin Guidara said the Italian banking system “was solid” and that Libya wanted to make “diverse” investments in Italy, Europe and the United States.

“We are buying a lot -- not huge acquisitions but accurate choices based on the valuation of the real value of companies and their capacity to resist well the current crisis,” he said.

Italy is OPEC member Libya’s main European trade partner and Italian oil company ENI holds stakes in pipeline, natural gas and oil projects in Libya.

“We have bought Eni ENI.MI shares for 50 million euros. A modest number, but an indication of the faith we have in your oil company. And probably we will buy some more, but always keeping in mind the desire of diversification and not necessarily to control,” Bin Guidara said.

Business daily Il Sole 24 Ore said on Saturday the Libyan Central Bank planned to ask for a seat on UniCredit’s board.

Citing an unnamed source, it said the Libyan central bank was aiming for a vice-chairman post and had put Bin Guidara forward as candidate.

UniCredit declined to comment. Asked whether Libya would get a seat on the board, UniCredit CEO Alessandro Profumo said on Friday he had “no idea” and that this was something the board and shareholders must discuss.

UniCredit, whose shares lost 36 percent in the last month, has said it would boost capital by 6.6 billion euros to shore up its financial strength. It has also slashed forecasts to just 39 euro cents per share this year from around 52 euro cents.

“The crisis could last but it is wrong to think that companies such as UniCredit or Eni or elsewhere, Bayer, to cite a few, could finish bankrupt. They are solid,” Bin Guidara said.

“Italian banks, in particular, do not have anything in common with U.S. or British ones.”

Libya has also been tipped as an investor in Telecom Italia TLIT.MI, the former telecoms monopoly now controlled by a group including Spain’s Telefonica TEF.MC and also looking for extra cash, according to sources close to the matter.

Telecom Italia has acknowledged it has been approached by investors but has not revealed their identity.