There are five proposals from interested parties to taken over Portugal’s loss-making Novo Banco which, as Banco Espírito Santo, was once the powerhouse behind Ricardo Salgado’s Grupo Espírito Santo empire.
The 5 p.m. deadline was met by all five on the short-list, including latecomer Minsheng Financial Holding Corporation Ltd which was not disqualified despite not completing the preliminary hurdles necessary to be considered as a viable bidder.
All bidders were asked to increase their June 30th bids. This request came from an increasingly nervous Bank of Portugal governor, Carlos Costa (pictured) whose idea it was to create Novo Banco as a recipient of all the good parts of the insolvent BES back in late 2014 and to fund this ‘new bank’ with money from the taxpayer and from the Resolution Fund paid into by Portugal's banks.
Under final consideration are Banco Português de Investimento (BPI), Banco Comercial Português (BCP), US funds Apollo-Centerbridge and Lone Star, and China's Minsheng Financial Holding Corporation Ltd.
Minsheng aims to float or sell on much of Novo Banco in a deal promoted by Haitong Bank’s José Maria Ricciardi, an Espírito Santo family member who somehow has got in on the act, despite his surname being a giveaway as to his real intentions.
The final decision on Novo Bano's future ownership structure will be taken after the final proposals have been mulled over by Carlos Costa and Sergio Monteiro, who is conducting the sale process as a rather well-paid consultant.
If the final offers are uncomplicated, then the decision may be taken in a few days. if so, it’s over to the European authorities, including the European Central Bank, which oversees Novo Banco and who will no doubt have some choice words to say about the losses to the Portuguese system by selling the bank for way less than the €4.9 billion required.
The expectation is that the new owner will be announced by the end of 2016 as per the new timetable, which was extended due to the complexity of the initial offers. Also, all the bids were way short of the €4.9 billion needed by the Bank of Portugal’s Carlos Costa to save face, he extended the bidding period in the vain hope that someone would get him out of trouble.
The government's goal is repay the taxpayer the €1 billion used to set up Novo Banco, and then refund the remaining €3.9 billion owed to the Resolution Fund.
The June offers were of between €500 million and €1 billion and the bids now on the table are unlikely to be much improved - Carols Costa's days are numbered as he needs €4.9 billion to break even, let alone show a profit on this 'investment.'
Prime Minister, António Costa, has been watching Carlos Costa’s slide into yet further ignominy while Finance Minister, Mario Centeno, has stated to Brussels that if the bank is not sold off before August 2017, it simply will be wound up.
