Banif Receives Six Offers to Buy State's Majority Stake

  • State owns 60.5% of lender as result of a 2013 recap plan
  • Banif is facing in-depth probe from EU Commission on state aid

Portuguese lender Banif - Banco Internacional do Funchal SA received six offers to buy the state’s majority stake, the bank said in a regulatory filing.

Spain’s Banco Santander SA is among the bidders, a person familiar with the sale said. Banif didn’t name the bidders in the filing. A spokeswoman at Banif declined to comment and calls to Santander’s Portuguese unit outside office hours weren’t answered.

In 2013, the Portuguese state agreed to inject 1.1 billion euros ($1.2 billion) in Banif after the lender was unable to raise enough capital to meet a regulatory threshold. The bank has since held a series of capital increases, helping the government cut its stake to 60.5 percent.

The Portuguese state subscribed 700 million euros of special stock and 400 million euros in contingent convertible bonds in 2013. Banif has repurchased part of the CoCos, reducing the amount of these instruments to 125 million euros. It had pledged to pay back all of the CoCos by the end of 2014, and the rest of the state aid by the end of 2017.

Banif is facing a probe from the European Commission into the restructuring plan it submitted following its bailout. The commission has said that it may not be enough to allow the bank to repay the state.

The shares have dropped 65 percent this year, giving the lender a market value of about 231 million euros. Shares were suspended Thursday by the country’s securities regulator, pending news on the sale process.

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