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ESFG threatens lawsuit if Novo Banco doesn't pay out on insurer sale
September 18, 2014 / 5:18 PM / 3 years ago

ESFG threatens lawsuit if Novo Banco doesn't pay out on insurer sale

LISBON, Sept 18 (Reuters) - An insolvent holding company of Portugal’s Espirito Santo family has threatened a lawsuit if the successor of collapsed Banco Espirito Santo does not hand over the proceeds of the proposed sale of the group’s Portuguese insurer Tranquilidade.

Novo Banco, the good bank salvaged from BES’s August rescue, has laid claim to Tranquilidade and wants to sell it to U.S. fund Apollo Global Management.

Espirito Santo Financial Group (ESFG), which applied for court protection along with several other family companies after failing to meet debts, claims to be the insurer’s true owner.

“ESFG considers once more that the owner of Tranquilidade is its subsidiary Partran, despite allegations made by Novo Banco that ESFG considers as unfounded from a legal view point,” ESFG said in a statement published on Thursday evening.

ESFG said that is therefore expects Partran to receive the proceeds of the sale of Tranquilidade to Apollo. “If this is not the the case, ESFG will consider all possibilities in order to protect its legal rights and those of its subsidiary Partran in the courts,” it said.

ESFG said Novo Banco had also not considered an offer by Zurich Insurance Group to buy Tranquilidade which was higher than Apollo’s bid.

The sale of Tranquilidade already faces opposition from a group of bondholders of ESF Portugal, who have requested a court injunction against the sale of Tranquilidade. Novo Banco has insisted the insurer is its to sell because it was pledged as security for Espirito Santo commitments to the bank. (Reporting By Axel Bugge; Editing by Laura Noonan)

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