Aethel Partners to block Novo Banco sale

novobancoshinylogoAethel Partners, the company that on February 24th sent in a knock-out bid for Novo Banco that could have seen €4 billion returned to long-suffering taxpayers, was led up the garden path by the Bank of Portugal, according to the company which now has launched a legal process to halt the Novo Banco sale.

At the time, the Bank of Portugal was negotiating ‘exclusively’ with US vulture fund, Lone Star, but Aethel Partners sent a letter of intent and a proposal to acquire Novo Banco for significantly more than the Lone Star bid of just €750 million up front for 75% of the company.

UK based Aethel Partners was not happy when the Bank of Portugal announced that it had agreed the sale of Novo Banco to the US fund and now says it was deceived and is preparing a lawsuit aimed at blocking the sale.

Aethel Partners, of 42 Berkley Square, is run by Ricardo Jorge dos Santos Silva and Ms Aba Rosa Schubert, who said they had the support of institutional investors to fund the deal and proposed keeping a stake in Novo Banco for at least five years.

In February 2017, the Bank of Portugal reiterated that it "reserves the right, at its discretion and at any time, to modify the rules of the strategic sale procedure, or even to cancel it, in particular, should the Bank of Portugal decide to follow another sales procedure in order to achieve the maximisation of the value to be obtained with the sale of Novo Banco."

Maximising the sale price now seems the last thing the Bank of Portugal was interested in, as its struggling governor, Carlos Costa, continued with the Lone Star discussions, finally announcing the US bidder had been accepted.

This news caused the proverbial to hit the fan with great force. Opposition and left wing parties were incandescent at the terms of the Lone Star agreement and the miserly price offered, especially when last minute bids had come in from two companies, Aethel partners being one of them.

Aethel Partners' owners now claim that the Bank of Portugal never refused its offer to buy Novo Banco and had led it up the garden path with the supervisor's financial adviser seeking clarification on some of the offer detail.

Carlos Costa’s handling of the Novo Banco sale can be described, at best, as appalling. The Resolution Fund is owed €3.9 billion, money lent to it by the government keen to avoid accusations of State funding.

By accepting the Lone Star bid of €750 million for 75% of Novo Banco’s shares, the taxpayer remains at risk for another €4 billion and will not receive a cent of the headline offer price as this money will be spent on ‘restoring the balance sheet.’

While the Lone Star bid is being assessed by the European Central Bank and Brussels, the taxpayer can look forward to another loss with billions of euros of loans repayable over the next few decades, if at all, should Lone Star’s bid prevail.

__________

“Aethel Partners LLP is an advisory firm. The firm specialises in structuring, advice, and capital raising for corporate and institutional clients. It also caters to buy-side clients by offering investment origination and execution tailored to geographic, thematic, and technical targets. The firm specially focuses on credit and special situations. It is global in reach and sector agnostic. Aethel Partners LLP is headquartered in London, United Kingdom.”

 

See also: 

'New bid from London - '€4 billion for Novo Banco'' http://algarvedailynews.com/news/11138-new-bid-from-london-4-billion-for-novo-banco

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Comments  

+1 #3 Margaridaana 2017-04-20 15:28
Sorry Phil, red arrow-ed you by mistake. You have put forward a very interesting hypothesis. Definite green arrow!
+4 #2 Geoff Harris 2017-04-19 09:01
Like Phil I'm no banker, but I'm an EU citizen from 'oop north' and what shrieks at you is why anyone ever thought Portugal was suitable to be in the European Union UNSUPERVISED. For 30 years. With its prior long history of abysmal Public Administration that treated 'ordinary' Portuguese as no better than dirt.

reserves the right, at its discretion and at any time, to modify the rules - what nonsense is this from the hopelessly failing Portuguese Bank Regulator? How can any future investor have the slightest confidence in Portuguese Investment Regulations if they are not even worth the air expended on announcing them ?

Recent entrants to the EU are under supervision ... perhaps for years. Why is this not being reimposed on Portugal? It clearly has always fallen far short of the minimum standards of public administration. Is it only because of Greece and the long held concept north of the Pyrenees that "one nutter is all we can handle at the moment"?
+3 #1 Phil Austin 2017-04-18 23:52
I may have commented before that I think the sale of NB to Lone Star is a scandal and I've probably also said that I'm no banker but i do find the whole BES affair and the way some things work here in Portugal fascinating. I accept that in a country with a relatively low population everybody will know or be related to each other too.

But here's a thing. Ricardo Salgado is a great-grandson of José Maria do Espírito Santo Silva. Is it just a coincidence that Aethel Partners, of 42 Berkley Square, is run by Ricardo Jorge dos Santos Silva and a.n.other?

Are they related, I wonder? Is the family trying to buy back the good part of the bank on the quiet?

Just a thought!

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