“The Bank of Portugal decided to select the potential investor Lone Star for a definitive phase of negotiations, in conditions of exclusivity, with a view to finalising the terms of the sale of the Resolution Fund’s (Novo Banco’s sole shareholder) stake in Novo Banco,” the central bank said in a statement.
ON 4 January the BdP had identified Lone Star as “the best-placed entity” to conclude the acquisition of Novo Banco “successfully” announcing at the time that it would invite the fund to more “in-depth negotiations.”
According to the Portuguese press, Lone Star’s proposal for Novo Banco outlines sharing future dividends with the Resolution Fund, which is a positive for the central bank, but also demands state guarantees for potential losses that Novo Banco may yet have to take on, which the Government has refused.
Novo Banco is the transitional bank that kept the healthy assets of Banco Espírito Santo (BES), which was bailed out by the state on 3 August 2014, and which is now being sold.
The Portuguese finance minister later stressed in Brussels that no state guarantees had been given for Novo Banco and acknowledged that the bank may not be sold off 100 percent, stressing that “a second line of possible negotiation” is being considered”.
The minister insisted there would not be any state guarantees for Novo Banco, since “this is a position the government has taken and it is obviously going to maintain it”, and, when asked about the possibility of the Resolution Fund participating in its recapitalisation, he refused to comment on “details” of an on-going deal.
Mário Centeno stated that the sale of Novo Banco is progressing and that today’s decision by the Bank of Portugal (BdP) to negotiate exclusively with Lone Star was “just another step”.