July 14, 2014 / 7:36 AM / 4 years ago

ESFG sells part of stake in Banco Espirito Santo to repay loan

LISBON (Reuters) - Espirito Santo Financial Group (ESFG), the main shareholder in Portugal’s Banco Espirito Santo said on Monday it had to sell a 4.99 percent stake in the bank to repay a margin loan, which reduced its stake in the bank to 20.1 percent.

ESFG is part of the beleaguered business empire of the Espirito Santo family, which founded the country’s largest listed bank by assets, and has been under regulator scrutiny over financial problems at its holding companies. The family lost control of the bank in a capital raise in June.

“The sale of the 4.99 percent stake in the bank was made to raise proceeds to enable ESFG to satisfy its repayment obligations under a margin loan,” ESFG said in a statement.

“The proceeds of the sale, together with certain other collateral held by the lending bank, will result in the full and final payment of the margin loan and fully extinguishes all obligations thereunder,” it said.

Reporting By Andrei Khalip, editing by Axel Bugge

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