BofA Said to Drop Galp Sale Linked to Billionaire Dos Santos

  • Bank said to walk away from share sale to investors this month
  • Amorim sold a 5% stake in Galp valued at 485 million euros

Bank of America Corp. walked away from a role advising Amorim Energia BV, a company tied to controversial billionaire Isabel dos Santos, on its sale of a stake in Portugal’s Galp Energia SGPS SA after the bank’s internal committee didn’t sign off on the job, according to people with knowledge with the matter.

Dos Santos’s father, Angolan President Jose Eduardo dos Santos, named her chairwoman of state oil company Sociedade Nacional de Combustiveis de Angola, known as Sonangol, in June. The move was challenged by the country’s main opposition party, which accused the president of nepotism.

Sonangol, through its subsidiary Esperanza Holding BV, owns a 45 percent stake in Amorim, according to disclosures from Galp. Santos also has a holding in Esperanza, the people said, asking not to be named as the details aren’t public. Bank of America wasn’t able to complete its internal approval in time as the company debated issues including the risk to its reputation, the people said.

Bank of America forfeited a role in the deal this month, the people said. Global investment banks are becoming increasingly sensitive to risks to their reputation in an environment of higher regulatory scrutiny after a number of high-profile cases where firms were accused of having inappropriate relationships with clients.

Representatives for Bank of America and Amorim declined to comment. A spokesman for Dos Santos had no immediate comment.

Goldman Sachs Group Inc. was accused of exploiting its close ties with Libyan Investment Authority employees to sell inappropriately risky investments to the fund. Private Swiss bank BSI SA was ordered to close its Singapore operations in May for breaches of money laundering rules after it was linked to the troubled Malaysian state investment company.

Isabel dos Santos is Africa’s richest woman, with a net worth of $2.2 billion, according to Bloomberg Billionaires Index. She has stakes in companies including Angola’s largest mobile phone operator Unitel SA and Portuguese lender Banco BPI SA.

Stake Sale

Amorim sold a 5 percent stake in Galp valued at 485 million euros ($544 million) this month. Societe Generale SA was sole manager of the Galp sale, its biggest block sale mandate this year, according to data compiled by Bloomberg. A spokesman for Societe Generale declined to comment.

Amorim bought a 5 percent stake in the Portuguese energy company in 2012, increasing its holding in the company to 38 percent. After the latest sale, Amorim said it intends to maintain its position as largest shareholder in Galp.

Additional share sales raised about $49 billion in Europe this year compared with about $82 billion in the same period in 2015 as volatile markets kept shareholders from paring their stocks, data compiled by Bloomberg show.

Amorim Deals

Bank of America has done deals for Amorim before. The lender, along with Societe Generale, advised on Amorim’s placement of exchangeable bonds into shares of Galp for up to 400 million euros in 2013.

The Charlotte, North Carolina-based bank is separately working with Puma Energy Group Pte, which is part owned by commodity trader Trafigura Group Pte. and Sonangol, people familiar with the plans said. Puma is considering strategic options including a London initial public offering as early as next year, two of the people said. A representative for Puma didn’t immediately respond to an e-mail seeking comment.

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