BES holding company seeks protection from creditors

GMT 22:53 2014 Friday ,18 July

Arab Today, arab today BES holding company seeks protection from creditors

Espirito Santo Bank (BES)
Lisbon - AFP

The troubled holding company of Portugal's largest listed bank on Friday said it had filed for creditor protection as it struggles to pay a "material" amount of maturing debt.
Espirital Santo International said it has applied to be placed under management by Luxembourg authorities in a move that would be "more adequate than a rapid and massive liquidation".  
"The controlled management regime will allow the company to defend the interests of its creditors in a transparent and orderly way under the control of the courts and nominated officials," the company said in an statement.
The move will heap more pressure on Portugal's Banco Espirito Santo (BES), which was plunged into crisis when allegations surfaced that ESI had covered up accounting problems.
Portuguese authorities on Friday said they had opened several investigations into possible criminal offences related to Espirito Santo and its entities. Luxembourg-based ESI was already under investigation by local authorities.
Bank of Portugal governor Carlos Costa sought to allay fears about BES's creditworthiness on Friday, saying there "was no risk to the account holders" and "the solvency of the bank was guaranteed".
Fears ESI could default on its debt have rocked financial markets and underscored the fragility of the eurozone economy after years of crisis.
The company must now present a restructuring plan to a financial tribunal in order to be able to sell assets and raise funds, it said in a statement.

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