BRUSSELS, March 10 The European Commission said
on Friday it had cleared Portugal's 3.9 billion euro ($4.16
billion) recapitalisation of state-owned Caixa Geral de
Depositos (CGD) as it was carried out on market terms and
therefore involved no new state aid.
"Our assessment showed that Portugal's state as the sole
owner, is investing under the same conditions as a private owner
would have accepted. Therefore, the recapitalisation by the
State involves no new state aid," EU Competition Commissioner
Margrethe Vestager said in a statement.
Portugal notified the Commission of plans to restructure and
recapitalise CGD in December last year due to an insufficient
level of provisions against loan losses, the Commission said.
The plan involved a transfer of Portugal's 49 percent stake
in CGD subsidiary Parcaixa, worth 0.5 billion euros, to CGD and
a conversion of debt instruments worth around 0.9 billion.
Portugal will acquire new ordinary shares of CGD worth 2.5
The Commission said Portugal also presented an industrial
plan to ensure the bank's profitability, meaning it would
receive a market-based return on its investment.
($1 = 0.9384 euros)
(Reporting by Julia Fioretti, editing by David Evans)