BRUSSELS, March 10 (Reuters) - The European Commission said on Friday it had cleared Portugal’s 3.9 billion euro ($4.16 billion) recapitalisation of state-owned Caixa Geral de Depositos (CGD) as it was carried out on market terms and therefore involved no new state aid.
“Our assessment showed that Portugal’s state as the sole owner, is investing under the same conditions as a private owner would have accepted. Therefore, the recapitalisation by the State involves no new state aid,” EU Competition Commissioner Margrethe Vestager said in a statement.
Portugal notified the Commission of plans to restructure and recapitalise CGD in December last year due to an insufficient level of provisions against loan losses, the Commission said.
The plan involved a transfer of Portugal’s 49 percent stake in CGD subsidiary Parcaixa, worth 0.5 billion euros, to CGD and a conversion of debt instruments worth around 0.9 billion.
Portugal will acquire new ordinary shares of CGD worth 2.5 billion euros.
The Commission said Portugal also presented an industrial plan to ensure the bank’s profitability, meaning it would receive a market-based return on its investment. ($1 = 0.9384 euros) (Reporting by Julia Fioretti, editing by David Evans)