May 22, 2014 / 11:22 PM / 4 years ago

Espirito Santo International plans to shed some assets -WSJ

May 22 (Reuters) - Portuguese conglomerate Espirito Santo International SA plans to offload assets to plug holes in its accounts created by alleged irregularities recently uncovered by auditors, the Wall Street Journal reported late on Thursday, citing an official familiar with the situation.

The WSJ reported an international hotel and resort chain as assets that would be sold by the Espirito Santo International, which partly owns Portugal’s largest listed bank, Banco Espirito Santo SA (BES). ()

Espirito Santo International holds 49 percent of Espirito Santo Financial Group SA, which in turn holds 27.5 percent of BES.

BES’s shares plummeted on Wednesday after the bank issued a prospectus for a capital increase and listed potential risks around the operation. The bank warned of “reputational risks” because an external auditor had found irregularities in ESI’s accounts and concluded that the company “represents a serious financial situation.”

The conglomerate is not in danger of defaulting on its obligations, although it is looking to sell 1 billion euro ($1.37 billion) in non-financial assets this year to raise funds. These included its Tivoli Hotels & Resorts chain in Portugal and Brazil, the official, who spoke on condition of anonymity, told the daily.

The WSJ cited the official familiar with the situation as saying the alleged irregularities stem from the Portuguese conglomerate’s failure to correctly consolidate some of its international holdings.

According to the Journal, the official is with the Espirito Santo Group.

Espirito Santo International could not be reached for a comment outside of normal business hours.

$1 = 0.7323 Euros Reporting by Aashika Jain in Bangalore. Editing by Andre Grenon

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