(Recasts with higher exposure figure, adds detail from
LISBON, July 3 The largest shareholder in
Portugal's Banco Espirito Santo (BES) is owed 2.35
billion euros ($3.2 billion) by companies within the wider
Espirito Santo Group, a higher total than previously disclosed,
figures released on Thursday showed.
The disclosure, made by Luxembourg-based Espirito Santo
Financial Group (ESFG), sheds light on the financial
position of EFSG, which owns 25 percent of BES, Portugal's
largest listed bank and which is controlled by the Espirito
Santo family which recently lost control of the bank they
ESFG had previously said it was owed 1.37 billion euros by
two family holding companies, ESI and Rioforte, and had also
said it had taken a 700 million euros provision to guarantee the
repayment of ESI debt sold to retail clients of BES.
It was not clear if the 700 million was included either in
the 1.37 billion or the higher total of 2.35 billion, disclosed
on Thursday in a statement issued after European markets closed.
It said the increased exposure came because of guarantees it
had to give to repay short-term debt of Rioforte and ESI, who
are collectively known as GES.
ESFG had agreed to guarantee the paper after the Bank of
Portugal expressed concerns about the debt sale by BES to retail
clients, amid revelations of financial irregularities at one of
the companies, ESI.
It said the 2.35 billion euro exposure was partially secured
by collateral provided by GES in the form of shares in
non-financial investments. It did not say what these were.
Rioforte's assets include property holdings in Portugal.
ESFG also said it had external unsecured debt of 830.2
million euros at the end of June, up from 780.2 million three
months earlier. Its borrowings from BES were 823 million euros.
ESFG also said it was not under investigation by Luxembourg
authorities over accounts irregularities, responding to a
comment from Luxembourg's justice authorities which said last
week they had in May begun an investigation into three
Luxembourg-registered holding companies of Portugal's Espirito
Santo banking family, including ESFG.
However the Luxembourg authorities had not referred to
accounting issues, only alleged breaches of company law.
ESFG did not refer to any other possible breaches of company
law. It did refer to "material irregularities in the accounts of
its shareholder ES International", that were acknowledged by
ESFG and BES in May, making clear that ESFG was not being
investigated over that particular subject.
($1 = 0.7331 Euros)
(Reporting by Andrei Khalip; Editing by Axel Bugge and David