Brussels, 22/08/2014 (Agence Europe) - In early August, the European Commission gave the go-ahead to the resolution plan for Portugal's third-largest bank, Banco Espírito Santo S.A. (BES) (see EUROPE 11131).
The plan includes the resolution of BES and the immediate creation and capitalisation of a temporary “Bridge Bank.” BES's sound business activities - all €36.7 billion of deposits and senior debt and most of the assets - are being transferred to the Bridge Bank. In a press release, the Commission says the transfer will stabilise the activity that was formerly undertaken by BES while protecting depositors and other clients.
All shareholders and subordinated creditors will remain in BES, which will be wound down. Claims by related parties (that is to say, significant shareholders or board members) will also remain in BES.
Portugal's Resolution Fund will provide €4.9 billion as capital to the Bridge Bank, and to this end the Resolution Fund will receive a €4.4 billion loan from the Portuguese State. The loan will be primarily reimbursed by the proceeds of the sale of assets of the Bridge Bank. (MB)