Libya Raises Its Stake In Italy’s UniCredit

The Libyan Investment Authority (LIA) has bought a further 0.5% stake in Italy’s UniCredit to take its stake to 2.59%. With the Central Bank of Libya (CBL) already holding a 4.99% stake in the Italian banking group, this acquisition will raise the overall stake held by Libyan investors in the bank to 7.58%. According the Financial Times of 17 September, this latest purchase has made Libya “by far the largest shareholder in UniCredit, followed by the sovereign wealth fund of Abu Dhabi.” CBL Governor Farhat bin Guidara had previously indicated that Libya was looking for investment opportunities in Europe, the US and other emerging markets in order to diversify its investment portfolio (MEES, 3 November 2008). Libya’s most recent investment has sparked suspicion among Italian right wing politicians. “We are looking at a true and proper takeover,” said Luca Zaia, a prominent Northern League member and governor of the Veneto region, whose Cariverona foundation holds 4.64% of UniCredit. The Bank of Italy and Italian market regulator Consob have requested clarification regarding the nature of the Libyan stakes and whether LIA and the CBL “acted independently” of one another. 

UniCredit Chief Executive Steps Down

UniCredit CEO Alessandro Profumo has stepped down after being ousted by the board in a row over Libyan shareholders. In a 22 September statement, Italy’s biggest bank said that “the UniCredit board and Alessandro Profumo have agreed that…it is time for a change at the top.” Mr Profumo’s executive powers have been handed over to UniCredit Chairman Dieter Rampl on an interim basis until a successor is named. Mr Rampl stated on Wednesday that “Profumo’s departure was not linked directly to Libya’s building a stake in UniCredit, but was linked to the procedures and formalities in the way Profumo had acted.” Shareholders and politicians have both accused the former chief executive of allowing Libya to increase its holding in the Italian bank without notifying other top managers.

Copyright MEES 2010.