Over 90% of the drop in PT shares is due to its disastrous purchase of bonds in Rioforte, a Banco Espírito Santo Group subsidiary.
When news of PT's investment of almost €900 million in Rioforte debt was revealed, the run on the telecoms supplier's shares started, and has continued relentlessly throughout the Banco Espírito Santo Group collapse.
Some hope was evident this week as PT shares climbed 7.28% on the news that the PT Chief Executive Henrique Granadeiro had had his resignation accepted by a grateful board.
Despite this last minute rise in the share price, the company has seen the value of its shares fall 48.96% on the Lisbon stock exchange in just over a month.
The news of PT's exposure to Rioforte hit the market on June 26, around €900 million in a bond due for repayment in mid July.
PT's management admitted the company was exposed and that this had not been a board decision. The market regulator confirmed the dire news.
The bonds expired on 15 and 17 July and PT received not a cent as Rioforte imploded.
Henrique Granadeiro yesterday announced his departure but will remain at his desk until the end of September, or until someone better equipped to run a public company has been found.
Portugal Telecom has scheduled a shareholders meeting for the 8th of September to discuss the merger with Brazil's Oi and management hopes to avoid engaging in discussions about Rioforte, corporate governance, wayward Chief Executives and the reasons behind the purchase of a bond of dubious quality from a financial group that just happened to be PT's largest shareholder.
