PORTUGAL’S SIX largest banks have thrown a 600 million euro lifeline to save beleaguered BPP from financial ruin.
The rescue plan, master minded by the Bank of Portugal’s governor Vitor Constâncio and Finance Minister Fernando Teixeira dos Santos, involves cash injections from Caixa Geral de Depósitos, Millennium bcp, Banco Espírito Santo, Santander Totta and Credito Agrícola.
The move followed the government’s refusal to directly bail out the bankrupt bank or nationalise it as had been the case with Banco Português Nacional (BPN) earlier in the month.
The loan has been underwritten with BPP shares and other assets meaning that if the bank defaults then its assets will be absorbed by the six banks.
One of the conditions for the loan was the resignation of its CEO João Rendeiro as President of BPP’s Administration Board, although it is unclear what will happen to his lion share of the bank’s shares standing at 12.5 per cent.
The Bank of Portugal is likely now to nominate an independent team of directors to run the small investment bank.
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