The Portuguese bank is expected to extend the maturity of debt from Luís Filipe Vieira's companies after getting a green light from the Resolution Fund.
Novo Banco is expected to extend the maturity of debt from Luís Filipe Vieira’s companies after getting a green light from the Resolution Fund, the Banco de Portugal told Lusa on Monday.
“Regarding the Mandatorily Convertible Securities (VMOC) issued by Promovalor II and Inland, and whose conversion into shares – under the terms of the issue documents subscribed by BES in 2011 – is scheduled for August 31 2021, Novo Banco proposed to the Resolution Fund the extension of the respective maturity,” the BdP said.
This proposal “received a favourable opinion from the Monitoring Committee” of the Resolution Fund, added the source from the banking sector regulator.
At stake were €160 million of mandatorily convertible into shares (VMOC) of Promovalor II and Inland, whose maturity ended this Tuesday.
If Novo Banco does not extend the maturity of the debt, the bank becomes a shareholder of Luís Filipe Vieira’s companies, as the VMOCs would be immediately convertible into shares.
According to the Banco de Portugal, if the bank became a shareholder in Vieira’s companies, this would harm the capital of Novo Banco, as they have negative equity of around €200 million.
Also, according to the Banco de Portugal, the extension of the term of VMOCs is “now dependent on Novo Banco obtaining the agreement of the issuing companies.