(Adds details, background)
LISBON, Oct 20 (Reuters) - Portugal's Novo Banco -- the successor to bailed-out Banco Espirito Santo (BES) -- has moved closer to a rescue deal for its Angolan unit, with the African nation's central bank agreeing a recapitalisation plan for the local business.
Novo Banco will retain a 9.9 percent stake in BES Angola (BESA) under a deal which will see some of its loans to the unit converted into equity, the National Bank of Angola said on Monday.
Shareholders, as well as investors approved by the Angolan authorities, will also buy around $650 million of new shares in BESA Angola to bolster its capital, the central bank added.
BES had a 56 percent stake in BESA before the Portuguese lender's rescue in early August, which also saw BESA taken into administration by the Angolan central bank.
Portugal had to rescue BES to the tune of 4.9 billion euros ($6.3 billion), carving out a good bank -- Novo Banco -- and a bad bank that inherited the toxic debts of the collapsed business empire of the bank's founding Espirito Santo family.
Around 3 billion euros of the rescue funds were set aside to cover the lender's exposure to Angola, where BESA had piled up a risky credit portfolio laden with bad loans.
The measures proposed by the National Bank of Angola suggest that around a quarter of the risky loans are recoverable, which represents a potential upside for Novo Banco as it has written down the full 3 billion euros as losses.
The central bank said it would convert some 41.6 billion kwanzas ($422 million) of BES loans to BESA into a dollar loan repayable to Novo Banco in 18 months and the same amount into a loan repayable over 10 years.
Some 3.6 billion euros -- mostly BES's interbank loans to BESA -- would be transformed into BESA capital for the bank to be able to meet its commitments.
Angolan entities Portmill and Geni held 24 percent and 19 percent of the original BESA respectively.
The Portuguese authorities hope to sell Novo Banco in the coming months to recover the rescue loans and greater certainty over the Angolan business could help to attract investors.
(1 US dollar = 98.6950 Angolan new kwanza)
1 US dollar = 0.7833 euro Reporting by Segrio Goncalves and Andrei Khalip; Editing by Axel Bugge and Mark Potter