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LIA to dispose of Unicredit shares?
Posted on Friday, 22 October 2010 14:49
North African sovereign wealth fund Libyan Investment Authority (LIA) is considering selling its minority shareholding in Italian lender Unicredit, according to an unsourced report from Il Sole 24 Ore.

The move has been sparked by Unicredit asking for details about LIA’s links to Central Bank of Libya. The latter owns 5.0 per cent of the Rome-based bank – the threshold at which Unicredit restricts voting rights.

The sovereign wealth fund holds a 2.6 per cent interest, which is worth EUR 967.13 million based on present market prices.

It was established in 2006 by the General People’s Committee of Libya to manage the money generated from the country’s vast oil reserves.

Central Bank of Libya upped its Unicredit stake to just short of 5.0 per cent during the banking crisis in November 2008, acquiring stock that was worth EUR 432.37 million at the time.

This deal came a month after the Libyan central bank, together with LIA and Libyan Foreign Bank, bought a 3.4 per cent interest in a deal worth around EUR 1.12 billion, based on Unicredit’s share price of EUR 2.49 at the time.

The Italian bank is now trading at EUR 1.91.

It managed to stay profitable through the banking crisis, though net earnings plunged 45.8 per cent year-on-year in 2008 (FY 2008: EUR 5.00 billion; FY 2007: EUR 9.21 billion) and were down by a further 41.5 per cent year-on-year in 2009 (FY 2009: EUR 2.92 billion).

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