It's actually a little over $3 billion in liabilities if you take out provisions.Slight chance that a large chunk of that debt gets put back into Novo Banco's accounts. This is only if the courts, both in Portugal and London, rule in favor of some junior and senior debt holders challenging transfers from Novo Banco back to BES.
Goldman Sachs, Pimco,etc. are challenging two debt transfers; an $835 million loan transferred from Novo Banco back to BES,this is currently being litigated in London.Also,$2.25 billion in Senior bond debt was moved back to BES late last year to improve Novo Banco's balance sheet and Tier 1 capital ratio for a potential sale.
The Bank of Portugal has gone on the record saying that they will not abide by the London court's decision so how that plays out remains to be seen.
Daniel Loeb head of Third Point, LLC is also challenging the August, 2014 resolution taken by the Bank of Portugal saying it was unfair to shareholders and junior debt holders. His hedge fund controls 40% of the $750 million Euros in junior debt and was also a large shareholder.
The assets are only $159 million Euros as of the latest December, 2015 report; more funds could be recovered in the liquidation of the bank but this could take years.This bank had assets all over the globe although most of the good ones was transferred to Novo Banco with the resolution.
$3 billion Euro in loans issued by BES Angola, BES owned 55% of Angola's second largest bank, was ultimately their downfall. The Angolan government was guaranteeing the loans but reneged after the BOP resolution measures.Nobody knows where the money went,not surprising with the level of corruption there.
$1.8 billion has already been seized from the assets/accounts of former BES CEO Richard Salgado and other former executives. However, the holding company of BES, Espirito Santo Financial Group has several billion euros in debt claims in a Luxembourg court that could take priority over BES claims.
According to an article in a Portugal newspapers, their banking license could be revoked as soon as August 3rd and will than proceed with the liquidation.
Watching and holding a lot of shares of this one but it's a long term and lotto play.
