Shares in Saipem have fallen below the issue price for new stock in a cash call that fell short of the 2 billion euro ($2.01 billion) target the Italian energy services company had said it required to shore up its finances.
Saipem sold its new shares at 1.013 euros each, but quickly saw the price drop by more than 25% in early trading. By 10:00 GMT the firms Milan-listed shares were trading at 0.86 euros.
The company said announced it had raised only 70.4% of its targeted capital increase, with underwriters purchasing the shares left unsold. Selling the shares is unlikely to prove easy following the negative adjustment in the share price.
BNP Paribas, Citigroup, Deutsche Bank, HSBC, Intesa Sanpaolo and UniCredit were the joint global coordinators of the Saipem issue. ABN AMRO, Banca Akros, Banco BPM, Banco Santander, Barclays, BPER, Goldman Sachs International, Societe Generale and Stifel were listed as the joint bookrunners.
Between them the banks have pocketed 51 million euros in fees for their role, with the total cost of the cash call including other fees estimated to be as much as 80 million euros.
Saipem had presented a new business plan in March following a surprise profit warning in January, with the firm seeking additional funds from investors and making several proposals to cut operating costs.