Portugal's central bank relaunches sale of Novo Banco

15th January 2016, Comments 0 comments

Portugal's central bank on Friday relaunched the sale of Novo Banco, created as part of the rescue of Banco Espirito Santo (BES bank), after a first attempt last year was halted due to unsatisfactory bids.

The Bank of Portugal's Board of Governors said it had "decided to renew the sale process" of Novo Banco with details of the sale to be announced later.

The first attempt to sell the bank was halted in September after three investors had submitted bids.

The offers by Chinese insurance and banking group Anbang, Chinese conglomerate and investment group Fosun and the US investment fund Apollo were deemed "unsatisfactory".

Novo Banco was created from the ashes of BES, once one of Portugal's largest lenders, but which collapsed after reporting a record loss in 2014. Its three holding companies declared themselves insolvent amid accounting fraud allegations.

BES threatened to drag down Portugal's economy, which had only gingerly emerged from a three-year bailout, prompting the government and the European Union to swiftly come to the rescue.

The good assets of the ailing bank were transferred into Novo Banco as part of a 4.9-billion-euro ($5.5 billion) bailout of BES.

Since last year's failure to sell off Novo Banco, the central bank has boosted its capital and transferred some two billion euros ($2.2 billion) of its debt to BES, which is set for judicial liquidation.

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© 2016 AFP

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