Bloomberg News

Espirito Santo Financial Group Challenges Insurer Ownership

August 29, 2014

Espirito Santo Financial Group SA, part of the Espirito Santo Group that requested protection from creditors last month, said it’s the owner of insurer Tranquilidade, jeopardizing Novo Banco SA’s effort to sell it.

ESFG had pledged its holding in the insurer as a guarantee on debt issued by its indirect parent that was sold to retail customers of Banco Espirito Santo SA. That guarantee was transferred to Novo Banco, the bank regulators created to keep Banco Espirito Santo’s good assets.

ESFG “hasn’t been notified of the execution of the pledge” to transfer its stake and therefore is “still the owner,” the company said in a regulatory filing today. ESFG said it’s reviewing the legality of the pledge, adding that it may be illegal. The company will “legally react” against a sale of Tranquilidade, according to the statement.

Novo Banco is in talks to sell Tranquilidade to Apollo Global Management LLC (APO:US), a person with knowledge of the matter said this week. Novo Banco can keep the proceeds from the asset’s sale, a spokeswoman for Novo Banco, who asked not to be identified in line with company policy, said this week. Today, a Novo Banco spokesman, who also asked not to be identified in line with company policy, said the sale process is following its normal course.

A group of German and Swiss investors holding bonds sold by Espirito Santo Financial Portugal, a unit of ESFG, had already questioned the attempted sale.

To contact the reporter on this story: Anabela Reis in Lisbon at

To contact the editors responsible for this story: Elisa Martinuzzi at Edward Evans, Jim Silver

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