Portugal central bank: Novo Banco sale talks ongoing, no suspension

Productive Technologies

11/09/2015 11:13

LISBON, Sept 11 (Reuters) - The Bank of Portugal said on 
Friday negotiations with China's Fosun International over the 
sale of Novo Banco were proceeding and it would announce the 
results when ready, denying a report that the talks had been 
suspended. 
    Business daily Diario Economico reported earlier in the day 
that the sale process of Novo Banco would be suspended until 
after Portugal holds a general election on Oct. 4. 
    "In due time the central bank will announce the results of 
the negotiation process which it is carrying out to sell Novo 
Banco," the central bank said in a statement. 
    Citing sources close to the process, Diario Economico 
reported that the bid by Fosun was too low to lead to a sale. It 
said Fosun would only pay 1.5 billion euros for Novo Banco, the 
"good bank" carved out of the collapse last year of Banco 
Espirito Santo. 
    Novo Banco was created after a 4.9 billion euro bailout of 
BES in August 2014 and authorities are eager to recover as much 
of this amount as possible in the sale. 
    Under the terms of the bailout, Novo Banco must be sold 
within two years but the period can be extended by periods of 
one year if it is deemed in the public interest. 
    Still, financial sources have told Reuters that the talks 
with Fosun are complicated because Novo Banco has high risks, 
including litigation against it, that could depress the price. 
    New capital requirements by the European Central Bank could 
also dent Novo Banco's capital. 
    Talks between the central bank and China's Anbang Insurance 
Group Co - which was the top bidder in the sale process for Novo 
Banco - ended without agreement early this month. 
 
 (Reporting By Sergio Goncalves; Writing by Axel Bugge; Editing 
by Mark Heinrich) 
 ((axel.bugge@thomsonreuters.com; +351-213-509-201; Reuters 
Messaging: axel.bugge.thomsonreuters.com@reuters.net)) 
 
Keywords: NOVOBANCO/M&A