Edition 1424
20 May 2017
Edition: 1424

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Novo Banco sale should be completed by summer

by TPN/ Lusa, in Business · 20-04-2017 16:00:00 · 0 Comments

Portugal’s finance minister, Mário Centeno, said in parliament on Wednesday that he hoped the sale of Novo Banco “is concluded before the summer”.

“I would hope that this deal will be completed by the summer”, he said, when asked about the schedule to sell 75 percent of Novo Banco to the US Lone Star fund with the other 25 percent remaining in the hands of the Resolution Fund (a position that can be sold to the private sector at any time).
There are still some strings attached to the deal and if they are not met, the deal will be off and there is the risk that the bank will have to be liquidated.
One of them is the exchange of bonds to improve the Novo Banco capital by €500 million, which will imply penalties for the bondholders.
They may suggest a cut in the interest or increase the maturities or even both. The price of the bonds may also be changed.
The bondholders will be in a dilemma because if they don’t accept the proposed solution, Novo Banco may have to be liquidated, which would also impact their investment.

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Edition 1424
20 May 2017
Edition: 1424

Read this week's issue online exactly as it appears in print.

Twitter

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