The release of the Bank of Portugal, was sent to newsrooms shortly before the end of Wednesday and after a meeting of the board of directors of the central bank, has confirmed the expectations that already indicated for the choice of the Lone Star to open the first exclusive negotiations.
But the position of the team of Carlos Costa does not imply the elimination of other offerings that are on the top of the table, because you are now going negotiations between both parties and the final word rests with the Executive António Costa.
In a statement issued, the Bank of Portugal points out that the proposal of the Lone Star “is the one that ensures” the “stability of the financial system and the strengthening of confidence in the future of the New Bank”, which are the “objectives of the sales process that the Bank of Portugal is in the lead”.
The problem of the public endorsement
But the Bank of Portugal acknowledges that the offer of the Lone Star “presents determinants, namely a potential impact on public accounts, which seek to minimize or remove in the deepening of the negotiations which now begins”.
The constraints that Carlos Costa refers to in the statement relate to the public guarantees that the Lone Star wants to close the deal and, according to the Business you know, the Government of António Costa refuses to grant.
the task of The Bank of Portugal is now to convince this fund north american dispense with the existence of a state guarantee, a condition that the Apollo will also have placed on top of the table.
The proposal from Lone Star provides for the purchase of the institution by 750 million euros, with the strengthening of capital in an equal amount. However, the u.s. fund also proposes the creation of a vehicle to stay with the assets that he had not wished to acquire, by managing risk and recovery with the State. How such assets would be assured is not right but the Finance minister, Mário Centeno, assured this Wednesday that it will not be for guarantee of the State.
Apollo lurking
The Bank of Portugal said in a statement issued this evening that “this new phase of negotiations with the potential investor Lone Star does not exclude the improvement of the proposals of the other potential investors,” adding that these “have already shown willingness to do so.”
The Business knows that the consortium that brings together the Apollo and Centerbridge is in the wings, because to fail in the negotiations between the Banco de Portugal and the Lone Star, the second proposal of the alliance of north american will be recovered. Already the offering of China Minsheng is, in practice, out of the race.
In the interview to the DN and the TSF, the minister of Finance made it clear that it is the Government that will take the final decision on the sale of the New Bank. Even though, in the face of the proposals on the table, will choose to nationalize the institution to “ensure the stability of the financial system” and to avoid “involve taxpayers ‘money”.
the future of The New Bank continue to be so in the open, being that there will be three possible solutions: selling the private as the first option; the nationalization as a solution resource, and the settlement as a last chance.
it is Certain that the New Bank need you need an injection of capital, whether to be sold or nationalized, and the capital needs of the institution led by António Ramalho expected to amount to eur 750 million.
of The three proposals for the New Database
Of the five candidates for initial, among which are the BPI and BCP, the remaining three proposals firm for the purchase of the New Bank. In November, the offering of China Minsheng was the favorite. But its financial difficulties have led u.s. investors to gain advantage
LONE STAR
The proposal from Lone Star to the New Bank gained visibility when he began to realize that the offer chinese was losing favoritism, as they grew up their difficulties in providing the collateral required by the Bank of Portugal.
The u.s. fund, which has invested eur 700 million in real estate business in Portugal (paid 500 million for the four shopping centres Dolce Vita and 200 million by the “resort” in Vilamoura, algarve), is available to mobilize 1,500 million to stay with the New Bank.
Half of this value is the price that Lone Star offers to acquire 100% of the institution. In addition, the company led by John Grayken committed to inject other 750 million in the reinforcement of the solidity of the New Bank.
The offer, the validity of which ended on Wednesday, also provides for the creation of a vehicle to manage the assets that aren’t profitable, which benefits from a state guarantee, but with revenue guaranteed.
Before the improvement of the final proposals and with the chinese out of the race, the offer of the Lone Star became the favorite.
APOLLO GLOBAL MANAGEMENT
don’t know any details of the final proposal of the consortium that unites the Apollo and Centerbridge. It is only public that the first final offer of this alliance, was considered to be the least interesting, being a little ambitious financially. However, from the moment that it became clear that China Minsheng had no conditions to fulfill its financial bid, the consortium began to focus on improving its offer, in an attempt to undo the apparent favoritism of the Lone Star.
the efforts of The Apollo/Centerbridge intend to match, if not surpass, the proposed north american rival. However, there is one aspect in which this alliance if you want to differentiate between and that passes through the possible inclusion of investors the Portuguese in their solution to the New Bank. As the Business has reported, the group Violas Ferreira wants to be a part of the consortium, to act as the genesis of a future hard core of investors the Portuguese in the New Bank.
The final proposal magazine of the Apollo/Centerbridge was delivered before the decision of the Bank of Portugal.
CHINA MINSHENG FINANCIAL HOLDING company
The interest of China Minsheng Loan was the last to be known. The name of the chinese group appeared publicly only in October, even though the “holding company” headed by Li Huaizhen be working on the dossier of the New Bank for more than four months, counting with the financial support of Haitong Bank, the former investment bank of BES in the meantime sold to a financial group of Hong Kong.
The proposal the chinese won a ballast during the official visit of the prime minister to China last October. In this visit, the chinese investor has expressed António Costa your commitment to the purchase of the New Bank.
This interest has resulted in a proposal to a firm that was considered to be the most interesting. The China Minsheng proposed to buy the majority of the institution by 600 million euros to inject 150 million in a capital increase and, in the longer term, pay more 150 million to stay with the entire bank. However, the group never arrived to provide the financial guarantee required by the Bank of Portugal, finishing out of the race.
(news last updated at 00:29)
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