October 11, 2017 / 10:13 AM / a year ago

EU regulators clear Novo Banco's sale, revamp

BRUSSELS (Reuters) - EU state aid regulators approved on Wednesday the sale of Portuguese state-rescued Novo Banco and its subsequent revamp by its new owner U.S. private equity firm Lone Star.

FILE PHOTO - A man walks near the logo of Portuguese bank Novo Banco in downtown Lisbon, Portugal April 12, 2017. REUTERS/Rafael Marchante

The European Commission said the restructuring would ensure the bank’s long-term viability. Novo Banco was carved out of Portugal’s biggest ever bank collapse in 2014 after a 4.9-billion-euro (4.39 billion pounds) rescue of Banco Espirito Santo.

“We have approved Portugal’s plans to grant state aid to Novo Banco under EU rules, based on the bank’s far-reaching restructuring plan and measures taken to limit distortions to competition,” European Competition Commissioner Margrethe Vestager said in a statement.

“Now it is important that the new owner successfully enacts the plan, so that that the bank can support the Portuguese economy,” she continued.

Reporting by Foo Yun Chee; editing by Philip Blenkinsop

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