MILAN (Reuters) – Italian banks have backed a 720 million euro rescue plan ($806 million) for rival Carige that will hand control of the Genoa-based bank to U.S. asset manager BlackRock, the head of a banking fund said on Monday.

Carige was placed under special administration by the European Central Bank at the start of the year after Italy’s Malacalza family, the lender’s top shareholder, blocked a proposed cash call, derailing an industry-financed rescue.

Italian banks bought a 320 million euro hybrid bond issued by Carige in November to beef up its capital reserves. The investment was carried out through the voluntary-contribution arm of Italy’s FITD depositor protection fund.

Speaking to reporters on Monday after a meeting of the voluntary scheme’s steering committee, FITD chairman Salvatore Maccarone said banks were set to convert 313 million euros worth of the hybrid bond into equity, giving them a roughly 43 percent stake in Carige.

The debt-to-equity conversion is expected to receive final approval at an FITD general meeting on May 14, he said, adding the whole rescue plan, which includes the issue of further additional shares, would then be presented to the European Central Bank on May 17.

“It’s a deal which we believe will solve (Carige’s) problems once and for all,” Maccarone said.

The exact size of BlackRock’s investment is not yet known but it will cover the remainder of the new share issue apart from a small amount which will be available to current shareholders. BlackRock will take operational control and name a new chief executive, Maccarone said.

The deal needs to be approved by Carige’s shareholders, meaning the position of the Malacalza family, which holds a 27.6 percent stake, will be key.

A shareholder meeting to vote on the plan is expected to take place in June or July, trade union FABI said in a statement after a meeting with the bank’s special administrators.

The union said the cash call should take place after the summer and that no additional job cuts were planned beyond the 1,250 cuts already announced in February.

The family of steel billionaires will see its holding heavily diluted, even if it buys into the portion of the cash call reserved for current shareholders.

The Malacalzas have invested more than 400 million euros in Carige since 2015, although their stake was worth just 23 million euros when the bank was placed under special administration and trading in the stock halted.

The government has earmarked up to 1 billion euros to buy Carige shares and stands ready to step in should a private investor fail to seal a deal.

State-owned soured loan vehicle SGA will take on the bank’s bad loans under the plan.

“The overall deal has a number of pieces that must fall into place”, Maccarone said, including BlackRock being granted a waiver from a regulatory obligation to launch a full takeover bid for the bank.

Carige has been laid low by years of mismanagement and an excessive exposure to the depressed economy of the northwestern Liguria region.

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