LISBON Jan 5 Portugal's central bank has chosen
U.S. private equity firm Lone Star as the leading candidate to
buy Novo Banco, the bank carved out of collapsed Banco Espirito
Santo (BES), the central bank said in a statement.
The central bank now plans to hold further talks with Lone
Star after selecting it ahead of other prospective purchasers
including China's Minsheng Financial Holding and U.S. funds
Apollo and Centerbridge.
Portugal had hoped to decide on the sale of Novo Banco by
the end of last year ahead of a final August 2017 deadline for
"At the current moment of the negotiation, the potential
proposal by Lone Star is the one that goes the furthest," in
ensuring stability of the financial system and confidence in
Novo Banco, the central bank said in a statement.
But the central bank added that Lone Star set conditions in
its offer that could have an impact on public accounts, which it
will seek to "minimise or remove in the deeper negotiations that
Finance Minister Mario Centeno said on Wednesday that
Portugal was not ready to complete the sale of Novo Banco,
adding that the government was not prepared to present a state
guarantee for the potential buyer.
Portugal salvaged Novo Banco, or the "good bank" in a
4.9-billion-euro rescue of BES in 2014, which collapsed under
the weight of debts of its founding family. An attempt to sell
Novo Banco in 2015 failed because the bids were considered too
The Portuguese authorities have not said how much they are
seeking for Novo Banco. The government itself put up 3.9 billion
euros ($4.1 billion) for the rescue of BES but analysts doubt it
will recover anything near that figure in the sale.
The rescue has led to a series of court cases by
shareholders and other stakeholders hit by the process,
prompting some bidders to request state guarantees to protect
them against potential future legal liabilities.
The central bank said that the next phase of negotiations
with Lone Star does not prevent other bidders from returning
with improved offers.
($1 = 0.9515 euros)
(Reporting By Axel Bugge; Editing by Keith Weir)