Italy is considering giving state lender Cassa Depositi e Prestiti (CDP) financial backing to fund strategic companies weakened by the novel coronavirus crisis and protect them from hostile takeovers, two sources close to the matter told Reuters.
FILE PHOTO: A woman in a face mask is seen in front of the Italian Stock Exchange in Milan, as the country is hit by the coronavirus outbreak. Italy, February 25, 2020. REUTERS/Flavio Lo Scalzo/File Photo
Italy, one of the countries hardest hit by the virus with more than 24,600 deaths, expects its economy to contract by around 8% this year as a result of the government’s decision to shut down most shops and factories to contain the epidemic. “The Treasury is looking at a scheme to provide CDP with an equity fund to invest in core companies,” one of the two sources said asking not to be named because of the sensitivity of the matter.
Under the Commission’s proposal, companies in which EU countries acquire a stake have up to two years to buy back the shares. If they fail to do so, they would be obliged to increase their stake further. The details of the plan have yet to be finalised.
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