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Cr. Agricole to subscribe 10 mln euros to Portugal BES cash call
May 16, 2014 / 9:49 AM / 4 years ago

Cr. Agricole to subscribe 10 mln euros to Portugal BES cash call

PARIS, May 16 (Reuters) - French bank Credit Agricole, which owns 20 percent of Portugal’s Banco Espirito Santo, said on Friday it would invest 10 million euros in the 1.045 billion euros cash call by the Portuguese bank - a decision that will dilute its stake.

Credit Agricole said in its annual report earlier this year that it was refocusing its banking holdings with a “redefinition of a partnership” with Banco Espirito Santo, whose business had been weakened by the economic crisis.

Banco Espirito Santo (BES), Portugal’s largest listed bank, launched on Thursday a capital increase of up to 1.045 billion euros after the bank posted a loss in the first quarter due to impairments for bad loans.

In the rights issue, BES will offer shares at a price of 0.65 euros per share. Shares in BES traded down 9.4 percent at 0908 GMT at 0.959 euros a share.

Credit Agricole said in a statement it would finance the move “by investing a portion of the proceeds raised by selling the preferential subscription rights it will receive as part of the transaction”.

France’s third-largest listed bank is concentrating its business focus in France and Italy and has slashed its balance sheet after a loss-making international expansion spree.

Reporting by Maya Nikolaeva; Editing by Brian Love

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