Lone Star acquires 75% stake in Novo Banco

The deal saw the GP inject €1bn for the acquisition of a 75% stake, with an initial €750m ticket followed by an additional €250m injection within three years. As part of the transaction, the Portuguese state-backed Fundo de Resolução will retain the remaining 25% stake.

The deal is subjected to regulatory approval from European authorities and foresees a contingent capitalisation mechanism that aims to protect the position of the minority shareholder. As part of the agreement, Fundo de Resolução committed to inject further capital into the asset if a certain capital shortfall should result from poor performances of aforespecified loans held by the bank, or following a certain evolution of the bank's capitalisation levels, according to a statement.

Furthermore, the lender will issue a new €500m non-subordinated bond to support its expansion.

Lone Star's winning bid marks the end of a long competitive auction process that saw several other institutional investors involved, including Apollo Global Management, Cerberus Capital Management, China Minsheng Financial Holding Corporation, Centrebridge Partners and Aethel Partners. The selling process took more than two years.

Company
Headquartered in Lisbon, Novo Banco was founded in 2014 by the Bank of Portugal following the restructuring of assets and liabilities of Banco Espirito Santo (BES), which collapsed in a €4.9bn bailout in 2014, €3.9bn of which came from state loans, according to press reports.

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• Topics
• Buyouts
• Financials
• Southern Europe
• Portugal
• Lone Star Funds