March 27, 2012 / 3:35 PM / 6 years ago

UPDATE 1-Portugal gets EU nod to sell bailed-out bank BPN

(Rewrites with government statement on sale date)

* Government says sale to be signed on Friday

* BPN sale was part of international bailout terms

BRUSSELS/LISBON, March 27 (Reuters) - The Portuguese unit of Angola’s Banco BIC will buy nationalised lender Banco Portugues de Negocios (BPN) on Friday after the European Union approved the Portuguese bank’s restructuring, opening the way for completion of the agreed deal.

Portuguese authorities took control of BPN in 2008 after a criminal investigation into fraud and money laundering, which preceded the global financial crisis.

Finding a buyer for the troubled bank was among the terms of Portugal’s 78 billion euro ($103.9 billion) bailout agreed with the European Union and the International Monetary Fund last year.

“Following the favourable (EU) decision, the government informs that on Friday, March 30, the contract of acquisition of BPN between the Portuguese state and Banco BIC will be signed,” the Portuguese finance ministry said after the EU cleared BPN’s restructuring on Tuesday.

Last year, the government picked a 40 million euro ($53.3 million) bid by the local unit of Banco BIC for BPN - only a tiny fraction of the more than 2 billion euros the state spent to recapitalise the bank.

The finance ministry said the sale of BPN would help the stability of the Portuguese financial system, safeguard the interests of depositors and keep a significant number of jobs.

The European Commission said BPN’s restructuring approval includes a ban on acquisitions and dividends by the bank and would ensure that it would not have an unfair advantage over rivals as a result of its state bailout.

The European Union executive said Portugal also promised to set a limit on BPN’s Core Tier 1 capital and modify the liquidity lines requested by Banco BIC Portugal that are to be granted by state-owned Caixa Geral de Depositos.

BNP will also be barred from exercising call option rights related to subordinated bond holders until the end of 2016.

Portugal’s banks in general have become overly dependent on European Central Bank funding after being squeezed out of the interbank market as lenders grew distrustful of banks in countries at the centre of the euro zone debt crisis. They have been selling assets to improve capital ratios. ($1 = 0.7504 euros) (Reporting by Foo Yun Chee and Andrei Khalip; Editing by Erica Billingham)

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