The Novo Banco road-show is back in New York, having visited London this week and New York the week before.
A hopeful Sérgio Monteiro, on €25,000 for his inconvenience, is accompanied by bank boss Stock da Cunha and two other Novo Banco directors, Francisco Cary and Jorge Cardoso and aim to sell off the loss making bank to a rich American financial institution.
The list of potential investors for Novo Banco is somewhat slimmer than in 2015 as many financial institutions are taking the Bank of Portugal to court and therefore are prohibited from making a play for Novo Banco this time around.
The lawsuits that so far have been filed against the Bank of Portugal, due to decisions taken by its governor Carlos Costa after ‘rescuing’ the collapsed BES in 2014, have ruled out 25 potential buyers including some big names with the fire power to pay cash.
Among those excused from the bidding are BlackRock, Goldman Sachs and Pimco who, along with 11 others, announced on March 24th that they were to sue the Bank of Portugal over the €1.8 billion senior bond scandal that saw their investments plummet to nearly zero.
These international investors say those Portuguese investors with similar bonds have suffered no losses and therefore claim that the Bank of Portugal discriminated against them on grounds of nationality.
Our man in the stretched limo says the mood on Wall Street is not favourable towards further US investment in Portugal or Portuguese companies due primarily to the Bank of Portugal's governor who is viewed as lacking grasp in his regulatory role and, in the case of the senior bonds, the financial regulator being involved in State sponsored duplicity and theft.
With the big US names out of the way, there may be some ‘bottom feeders’ interested in Novo Banco but at nowhere approaching the price needed to get the Bank of Portugal's governor, Carlos Costa, off the hook for the €4.9 billion in taxpayer and Resolution Fund money he was allowed to use to turn BES into Novo Banco.
The former Secretary of State for Transport and Communications, Sérgio Monteiro, says that he will agree a sale before July 2016 in a process that is open only to institutional investors. The Treasury has made no comment but would be delighted to be impressed by cash bids over €4.9 billion.
In 2015, sale negotiations were terminated by the Bank of Portugal as the two Chinese businesses failed to come close to the amount needed to restore the Bank of Portugal’s credibility and leave taxpayers at least at break even point.
The Chinese valued the business at around €1.3 billion. The only things that have changed since then is the eradication of €1.8 billion in Novo Banco bond debt, a further year's losses and the recent admission that the bank's exposure to the fragile Angolan economy is €900 million.
