Emigrés hit by BES collapse sign up ‘massively’ to Novo Banco proposal

Faced with the so-called ‘good bank’ in the throws of uncertainty, Portuguese emigrés who ‘lost’ their lifesavings in the collapse of BES three years ago have finally signed up “massively” to a proposal that will allow them to recover part of their money in another three years.

Put by Novo Banco, the bank that rose from the ashes of BES shedding many of the old bank’s ‘liabilities’, the proposal promises investors up to 75% of money invested in eight ‘financial products’: Euro Aforro 8, Poupança Plus 1, Poupança Plus 5, Poupança Plus 6 and Top Renda 4/5/6 and 7.

According to Lusa, Novo Banco has been in touch with around 1000 emigrés over the last two weeks, to explain the deal to them and find out how they feel about it.

The deadline for answers came this week – and acceptance has been “massive” said the emigré group’s vice-president Helena Batista.

Still to reach some kind of deal are over 600 emigrés who invested over €140 million in former BES products EG Premium and EuroAforro 10.

Lusa explains that these two plans were of such “financial complexity” that Novo Banco has still to come up with some kind of compensation arrangement.

The ‘sting’ in the tail of all the purported ‘good news’ however is that the way forwards is still dependant on the success of the ‘debt swap’ on which Novo Banco’s sale to US ‘vulture fund’ Lone Star depends (click here).

The swap is described simply as “underway now”, with the official line being that the sale to Lone Star should be completed by November.

But there is a lot more going on behind the scenes, as Reuters laid out briefly in July:

“A group of bondholders led by U.S. fund BlackRock have sought an injunction to block the sale, fearing it would damage their claim to be compensated for an estimated 1.5 billion euros in losses suffered on Novo Banco bonds”, says the financial news provider, adding that a “failed bidder” – almost certainly British firm Aethel Partners (click here) “has said it would go to court in a separate attempt to re-open the sale process”.

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