Banco Espírito Santo shares suspended in anticipation of news release

By TPN/Lusa, in News · 10-07-2014 11:53:00 · 1 Comments
Banco Espírito Santo shares suspended in anticipation of news release

Portugal's securities markets authority, the CMVM, announced on Thursday that it had suspended shares in Banco Espírito Santo, the country's largest non-state bank by assets, until "the release of relevant information about the issuer".
The shares had fallen sharply in trading before the announcement.

The CMVM's decision follows an announcement earlier in the day by Espírito Santo Financial Group (ESFG), the bank's largest shareholder, that it had suspended its own shares in Lisbon and Luxembourg, as well as bonds issued by one of its subsidiaries.


In a statement sent to Portugal's securities markets authority, the CMVM, the company explains that the decision to suspend the shares was taken due to "the material difficulties underway" especially at its largest shareholder, Espírito Santo International (ESI).
Fears about the financial solidity of the group had grown on reports that Banque Privée Espírito Santo, another group unit, had failed to reimburse some clients who had debt-related investments.


Portuguese financial daily Diário Económico earlier reported that Espírito Santo International is pondering whether to declare itself insolvent - a step that could be taken, according to the paper, if the company cannot reach an agreement with its main creditors. Insolvency could make it possible to go ahead with a restructuring plan to be approved by ESI shareholders at their general assembly scheduled for 29 July, Diário Económico concludes.


Credit rating agency Moody's on Wednesday slashed its rating for ESFG to Caa2 from B2, citing an increase in credit risk related to Espírito Santo International and Rioforte, another group company, neither of which are rated by Moody's.



Comments:

A company is either insolvent or solvent. The accounting definition is clear, and if a company trades when insolvent then its directors assume personal liability.

This 'group' is insolvent technically.

The fall out will be significant, especially for Portugal Telecom shareholders who hold bonds to the tune of .9 billion in this bad business. Get out quick.
by Rob from Algarve on 10-07-2014 09:02:00
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