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Portugal lets postal service set up bank after sell-off
November 29, 2013 / 4:56 PM / 4 years ago

Portugal lets postal service set up bank after sell-off

LISBON, Nov 29 (Reuters) - The Bank of Portugal has authorised the country’s postal service CTT, which is being privatised via the stock exchange, to set up banking services if future shareholders opt to do so, the company said on Friday.

The government expects to pocket up to 580 million euros ($789 million) from the sell-off required under the terms of the country’s EU/IMF bailout, and has previously said a banking license for the service’s many branches across Portugal could help boost CTT’s appeal among investors.

CTT said the authorisation was “subject to a set of conditions and requirements, especially confirmation by CTT’s new shareholders” that the postal bank project will be implemented under terms initially proposed by CTT in August.

“CTT has no obligation to set up the postal bank. It only has the option to do so,” it said, adding that its board decided on Thursday against any immediate action regarding banking activities.

Earlier this month, the government set a price range for the share offering of 4.10 to 5.52 euros per share, meaning it hopes to raise between 430 million euros and 580 million euros in the planned sale of 70 percent of CTT.

Retail investors were offered 21 million shares out of a total 105 million on the block, and securities market regulator CMVM said on Thursday that demand outstripped supply by 7 times. No numbers were provided for bids by institutional investors.

Monday is the last day when bids can be submitted and on Tuesday the government will fix the final price range. The shares will be floated on the Lisbon bourse on Thursday.

The government has said it has been encouraged by the privatisation of Britain’s Royal Mail in a similar offering last month and the flotation of Belgium’s bpost in June as strong equity markets have helped revive new listings in Europe this year.

Lisbon has already beaten its bailout target to raise 5.5 billion euros from privatisations by the end of 2013, having pocketed more than 6.4 billion euros from previous direct sales of stakes in power firms EDP and REN, as well as in airport operator ANA. ($1 = 0.7353 euros) (Reporting By Andrei Khalip; editing by Tom Pfeiffer)

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