April 17, 2019 / 4:29 PM / 4 months ago

UPDATE 1-Italian banks likely to fund part of Carige's rescue

(Adds quotes, details)

MILAN, April 17 (Reuters) - Italian banks are in talks with BlackRock over a possible deal to salvage troubled bank Carige, the head of a depositor guarantee fund financed by the country's banks said on Wednesday.

Carige was placed under special administration at the start of the year after the Malacalza family, its top shareholder, blocked a planned capital raising, derailing an industry-financed rescue plan.

Italian banks came to Carige's rescue in November by buying a 320 million euro ($362 million) hybrid bond needed to boost the bank's total capital ratio.

Under the potential deal with BlackRock, which has yet to be finalised, the banks are likely to convert the 320-million euro hybrid bond into equity, Salvatore Maccarone, chairman of the FITD depositor guarantee fund told reporters.

That would more than halve the bank's capital shortfall which currently stands at 630 million euros, reducing BlackRock's potential investment.

"The full conversion of the bond is a concrete option and I think it's likely," Maccarone told reporters after a meeting of the fund in Milan, adding however no decision had been taken.

The bank's temporary administrators are seeking a buyer for Carige and the deadline to submit binding offers has been pushed back to mid-May from an original early April 5 deadline.

The only known potential bidder is a specialist fund run by BlackRock.

"Things are moving ahead," Maccarone said, adding that the banks aimed to keep their combined holding in Carige after a bond conversion to below 50 percent.

The position of the Malcalzas, who hold 27.5 percent of Carige and would have to approve any rescue deal for it to go ahead, was not immediately clear.

Reporting by Giancarlo Navach and Stefano Bernabei, writing by Silvia Aloisi. Editing by Jane Merriman

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