Solution for commercial paper of the GES is coming soon – Economic

Solution for commercial paper of the GES is coming soon – Economic

Filipe Alves and Antonio Costa 00:05

New Management prepares differentiated solutions to accelerate process, rather than wait for comprehensive solution to the debt GES.

The New Bank will shortly present a solution for customers who invested in commercial paper of companies in the Espírito Santo Group (GES), found the Economic from sources close to the process.

Unlike management Vítor Bento, who sought a comprehensive approach to the problem of debt repayment of GES and BES signed by bank customers, the new team led by Stock da Cunha has sought to solve one problem at a time. In order to quickly resolve these problems that have undermined the credibility of the bank to customers, Stock da Cunha has prepared differentiated solutions to various debt instruments signed by customers. The new management team of the bank based its decision, of course, the extensive work done by the previous administration led by Vítor Bento, who had many of the contracts process.

The universe, in this case consists at around EUR billion in short-term debt of companies in the GES, the previous management of the New Bank promised to pay customers.
The repayment of this commercial paper to retail customers has been, however, the “Achilles Heel” of the new institution.

As the Economic reported, the Bank of Portugal wants to make an inventory rigorous of all securities and creditors included in the refund guarantee given by the regulator and the former directors of the New Bank.
The duties of the new administration, now under the command of Stock Eduardo da Cunha, was another waiting period in this dossier. This is because the new team must reassess the commercial proposal outlined by the former administration – which should pass through the conversion of the securities into deposits – with a capacity to introduce changes which have yet to be approved by the Bank of Portugal

There is a provision in the amount of EUR 865 million, to repay these bonds, which should be sufficient to ensure all payments, including securities already placed after February 14. This was one of the exclusions initially contemplated by the regulator, however, should not succeed. Still, whatever the commercial proposal of the new administration, it can not compromise the solvency ratios of the institution.