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Deals

Lone Star takes charge of Portugal's state-rescued Novo Banco

LISBON (Reuters) - U.S. private equity firm Lone Star signed on Wednesday the definitive agreement with Portugal’s bank resolution fund, giving it a 75 percent stake in state-rescued lender Novo Banco and putting an end to a near three-year sale process.

Under the deal, Lone Star will inject a total of 1 billion euros ($1.18 billion) into the bank, which was formed from the ashes of Banco Espirito Santo’s collapse in 2014 after a 4.9 billion euro rescue, mostly in public funds.

Earlier this month, Novo Banco said it had secured bondholders’ approval for a discounted debt buyback guaranteeing savings on interest worth more than 500 million euros, a key condition for completing the sale first agreed in March.

The country’s bank resolution fund, which is funded by all banks operating in Portugal, retains a 25 percent stake in Novo Banco.

Reporting By Sergio Goncalves, writing by Andrei Khalip, editing by Axel Bugge

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