According to a statement from Santander Totta, the bank led by Vieira Monteiro, 'taking into account the terms of reference related to the disposal of Novo Banco SA, Santander has decided to enter the first phase of the procedure, the delivery of an expression of interest.'
This 'expression of interest' is the first formal step and from now until December 31st, interested parties need to register so as to have access to detailed information about Novo Banco's finances to decide whether to make a formal bid.
So far, Banco Português de Investimento (BPI) and Apollo Global Management, the US private equity fund manager, have delivered expressions of interest in Novo Banco, now led by Eduardo Stock da Cunha.
Apollo Global Management specialises in ‘distressed assets’ and is also in the running to acquire the retail banking assets of Barclays in Portugal and Spain but failed in its bid for Caixa Seguros which went to the Chinese company Fosun for around €1 billion.
The Bank of Portugal is hoping for plenty of interest in the Novo Banco sale as the public purse it at risk of loss, as are the reputations of senior Bank of Portugal figures, if the offers received are significantly below the €3.9 billion spent in creating the bank from the ashes of Banco Espiríto Banco.
Novo Banco received an injection of €4.9 billion when it was set up as a result of Banco Espiríto Santo going bust - €3.9 billion was guaranteed by a taxpayer loan, €700 million was in the form of loan arranged by the Bank of Portugal and €300 million was from the Resolution Fund, topped up in a hurry and under duress from Portugal's other high street banks.
The government gets paid first so if the Novo Banco sale price is below €3.9 billion, the taxpayer will lose out, a situation that the Bank of Portugal fears and one the finance minister will have trouble in explaining away.
