LISBON, July 9 Portugal's Espirito Santo banking
family is set to propose to creditors an extension of the
maturities of the debts issued by its Luxembourg-registered
holding company, business daily Diario Economico reported on
Espirito Santo International (ESI) has been under scrutiny
since an audit found "material irregularities" at the holding
company of the family which founded Portugal's largest listed
bank by assets, Banco Espirito Santo (BES).
Diario Economico reported the company was likely to present
the plan to authorities in Luxembourg before proposing it to
creditors. The holding company has 7 billion euros ($9.6
billion) in debt, the paper said.
Luxembourg authorities said last month they had launched an
investigation into ESI over alleged breaches of company law.
Separately, weekly Expresso reported that clients holding
the debts of Espirito Santo family companies had received
proposals to swap the debt for equity. The paper said 85 percent
of commercial paper would be converted into equity and 15
percent would become long-term debt.
The weekly cited a source close to one of the family holding
companies as saying such a debt-for-equity swap was one of the
proposals on the table for the family.
Nobody at the family companies was immediately available to
comment on the stories.
ESI's debt has been the source of growing concerns around
Banco Espirito Santo because the bank sold the commercial paper
to its own retail clients. Still, BES has said there is a
provision of 700 million euros to pay back retail clients.
The Espirito Santo family has given no explanation for the
growing debts at its holding companies.
Last week Espirito Santo Financial Group (ESFG), the company
that holds the family's 25 percent stake in BES, said the
family's companies owed it 2.35 billion euros in June, up from
1.37 billion euros at the end of last year.
($1 = 0.7331 Euros)
(Reporting by Axel Bugge; Editing by Mark Potter)