(Adds Lone Star statement)
LISBON Feb 20 The Bank of Portugal will hold a
final round of exclusive negotiations with U.S. private equity
firm Lone Star as it seeks to flesh out the terms of the
potential sale of state-rescued lender Novo Banco, the central
bank said on Monday.
The start of exclusive talks with Lone Star, which
reaffirmed its commitment to reaching a deal, comes as Portugal
faces an August 2017 deadline to sell the bank that was carved
out of Banco Espirito Santo after its 2014 collapse.
"The Bank of Portugal has decided to select potential
investor Lone Star for a concluding round of exclusive
negotiations, with a view to finalising the possible terms of
the sale," the central bank said in a short statement, without
providing more details.
Olivier Brahin, president of Lone Star for Europe, said in a
separate statement his firm was "committed to confirming a final
agreement with the Bank of Portugal to support Novo Banco" with
capital and expertise and ensure it remains a strong player in
the local banking sector.
"We are deeply confident in Novo Banco’s future. Having
conducted a thorough analysis of the bank over the last several
months, we are convinced of Novo Banco’s value to the strong
future of the Portuguese economy."
Lone Star said that upon reaching an agreement with the Bank
of Portugal, it would work with the current Novo Banco
management to strengthen the bank's capital position and launch
new financial products and services.
The central bank last month picked Lone Star ahead of other
prospective buyers including China's Minsheng Financial Holding
and U.S. fund Apollo.
It said then that Lone Star had set conditions that could
have an impact on public accounts, which the state sought to
minimise via further talks.
The first attempt to sell Novo Banco, which in 2014 received
an injection of 3.9 billion euros in public funds, failed in
2015 after the state considered bids as too low.
Even now, it is only expected to recover a portion of that
money. The government has said that no option, including
nationalisation, is ruled out for Novo Banco, but anything other
than a sale would be a last-resort measure and would have to be
discussed with European authorities.
(Reporting by Andrei Khalip; Editing by Louise Heavens and Mark