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Portugal to rescue BES using bailout money
August 3, 2014 / 4:10 PM / 3 years ago

Portugal to rescue BES using bailout money

LISBON, Aug 3 (Reuters) - Troubled Portuguese lender Banco Espirito Santo is expected to be split up into a “bad” and “good” bank under a multi-billion euro state rescue plan being hashed out by Lisbon and EU authorities, people familiar with the talks said on Sunday.

The plan, aimed at saving a bank that has been engulfed by the dramatic fall of the Espirito Santo family’s business empire, includes using at least half of the 6 billion euros left from Portugal’s recently exited international bailout programme, these sources said.

The bailout money will be used to finance a special bank resolution fund set up by Portugal in 2012 that will in turn inject money into the new Banco Espirito Santo, or BES, “good bank”, these people said.

BES shares would be delisted under the plan, with shareholders likely to lose their investment, they added.

One source said the injection could be of at least 4 billion euros. It was not clear how the bad bank would be handled. (Writing By Andrei Khalip; Editing by Alessandra Galloni and Hugh Lawson)

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