The document ECO was able to obtain predicts the amounts to be paid to investors will start being transacted in May. The money comes from a fun that will be created, with the state’s guarantee.
BES’ former clients that have accepted the solution negotiated with the government will start receiving part of the money they invested in May 2017. The information was enclosed in the terms and conditions of the plan of the settlement, to which ECO had access and that António Costa, Portuguese prime minister, did not present in the press conference held last Monday. The money will come from a private fund, still to be created, but it will have the Portuguese state’s guarantee.
“It is reasonable to estimate the signing of the agreement contracts and the solution could be implemented by the end of March 2017, having the subscription period until the end of April and, if there is minimum participation [of 50%], the payment of the first tranche could take place in May, 2017”, is stated in the document.
Investors who accept these conditions will receive the money they invested in BES “in three tranches: the first will happen in 2017 after the agreement contract is signed, corresponding to 30% of the nominal amount of capital invested; the second and third correspond to the remaining value (…) to be paid in two equal tranches, one in 2018 and another in 2019”.
Clients who adhere to the solution will receive 75% of the amount they invested, with a maximum of 250 thousand euros, in operations up to 500 thousand euros and 50% for operations larger than 500 thousand. For example: for an operation of 400 thousand euros, 250 thousand will be paid for, since it is the maximum amount possible for that investment, although it is below 75%; for a 600 thousand euros operation, 300 thousand euros will be repaid.
Those clients will not, therefore, be able to recover the entire amount of money they invested, but they can be compensated for their losses. Those losses “may eventually even be complemented with commercial offers through banks, as well as the possibility, still being analyzed, of allowing [former clients] to deduct from their taxes the losses suffered up to the amount of capital invested”, is mentioned in the document.
The fund is private, but the guarantee comes from the State
The former clients from BES will receive their payments through a fund “built as if it were a private law vehicle” which will have to be finance by banking, and the amount to be financed depends on the minimum participation from clients to the solution presented: 286 million euros, at most. Although the financing comes from private law, it is guaranteed by the Portuguese state.
“The financing from banking will have the state’s guarantee (eventually, with terms still to be discussed, may be complemented with the Resolution Fund, in terms compatible to its other commitments)”, is also mentioned in the document ECO obtained.
Being assured from the state, it could have an impact on public accounts. However, that same document mentions: “the impact from this solution was a case study from Catholic University (…) and was obtained to assure the solution did not involve any burdens for taxpayers”.