Part of Espirito Santo empire may try to block sale of insurer
LISBON (Reuters) - Part of the troubled business empire of Portugal's Espirito Santo family said on Friday it may try to block the planned sale of an insurance company it once controlled, adding to opposition already expressed by a group of investors.
The challenges highlight the difficulties that bailed-out Banco Espirito Santo (BES) and its successor Novo Banco face as they try to recover some of the family's massive debts.
Luxembourg-registered Espirito Santo Financial Group (ESFG), a holding company that used to own insurer Tranquilidade and is now under creditor protection after defaulting on its debt, said in a statement the transfer of shares in Tranquilidade to Novo Banco - which is trying to sell the insurer - may be illegal.
It said it had not been notified of the execution of the transfer after the termination of a financing agreement, "and therefore concludes that it is still the owner of the shares". It added it was carrying out a full due diligence on the terms and conditions of a pledge it made to transfer the shares.
"ESFG thinks that the pledge may be illegal," it said.
Should the final conclusion of the due diligence confirm its preliminary view, "ESFG will legally react against the pledge of the shares, its execution and any sale of the same" that could be carried out by Novo Banco in the meantime, it said.
Once Portugal's largest listed lender, BES lost billions of euros from dealings with its Espirito Santo founding family. Regulators decided on Aug. 3 to put its healthy assets into a new entity, Novo Banco, and leave family borrowings, shareholders and junior creditors behind in BES.
Novo Banco's share of the spoils included Tranquilidade, a large Portuguese non-life insurer, and sources told Reuters last week that the new bank was close to sealing a 200 million euro ($264 million) deal to sell Tranquilidade to U.S. fund Apollo Global Management.
A Novo Banco spokesman said "the process of Tranquilidade's sale remains on course". The sale process started in early 2014 before the family financial problems became public knowledge. Continued...