Majority of BES investors sign up for repayment scheme

Portugal's Novo Banco said today that 80% of a large group of overseas investors now have accepted the solution proposed by management.

Those affected are holders of Jersey based EuroAforro 8, Poupança Plus and Top Renda investment schemes.

The 18th September deadline saw four in five investors going for the deal. 

The process now allows Novo Banco and Credit Suisse to cancel these discredited investments that customers were enticed to join in preference to holding money in deposit accounts that would have been guaranteed up to €100,000 by the Bank of Portugal.

Novo Banco says that it now can guarantee that 60% of savers’ money can be returned in two years depending on factors such as the helath of the bond market, or 90% if customers wait for six years and take staged payments. 

The scheme covers 12,000 account holders who invested €750 million in these now collapsed savings accounts which currently are frozen

Part of the deal involves a written undertaking signed by each member of this group not to take or pursue any legal action against the bank.

The Bank of Portugal kept these investments in ‘bad bank’ BES when it split the failed bank into two parts.

Solutions still are being sought for investors in other of BES’ investment schemes.

There was some more good news for Novo Banco today as Haitong bank, the Chinese finance house which recently purchased BES International, has agreed to repay money held by BESI but owned by the former BES.

€750 million will be returned within a relatively short time and the repayment may allow the deleveraging of the bank led by Eduardo da Cunha Stock or payments to creditors.

There is no precise timing indicated as to when the bank aims to get the money in. Haitong officially has three years in which to repay the amount, but early reimbursement is 'anticipated' by Novo Banco.

During the crisis Banco Espírito Santo had to pass funds to BESI as BES operations had been restricted. Now that BESI has been sold, the Chinese want to return the money early.

Novo Banco already has received €379 million from the sale of BESI to Haitong but the extra €750 million will come in very handy as Novo Banco’s Stock da Cunha continues his juggling act after Novo Banco failed to be sold and now has to perform and build up credibility.

There was some more good news for Novo Banco today as Haitong bank, the Chinese finance house which recently purchased BES International, has agreed to repay money held by BESI but owned by the former BES.

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