Sudden stop to the Burgo restructuring plan


After the agreement reached with difficulty in the last few months, the approval of the restructuring plan for Burgo’s debt (almost 800 million in the medium term) meets another obstacle. Two of the creditor banks, that is Veneto Banca and Popolare di Vicenza, have expressed some perplexity over the short-term refinancing of 400 million of debt. Thus the approval of the plan, for which unanimity is required, is blocked. It is the Italian economic and financial newspaper Il Sole 24 ore which refers to this discontent and which explains how Veneto Banca and B.P.Vicenza, although having limited exposure, would be against a course which has already lasted 18 months. The crux of the matter is the pledge of the Burgo securities granted by the majority shareholder, the Marchi family, to medium-term creditors (who will convert part of their exposure to Burgo into equity financial instruments). In practice, the two banks would want an extension of the guarantee to also cover creditors exposed in the short-term, which is currently not granted.