Novo Banco sold debt for 10% of true value

A public inquiry into what went wrong at Banco Espírito Santo and Novo Banco has heard that NB had sold bank loan debts accrued by the Moniz da Maia family for just 10% if its value.

Bernardo Moniz da Maia told the inquiry that he had offered €100 million to Novo Banco for the acquisition of Sogema’s debt, but needed more credit for the company’s Brazil operations.
“I am here as a debtor, neither to BES nor to Novo Banco, but to a fund which is not Portuguese and at a time when I had done everything for it not to have got to this point.”
The businessman started off the hearing by criticising the sale of his family’s debt at a 90% discount to a US fund when he presented a proposal to the bank to acquire the loan for €100 million, asking more credit to finance its Brazilian operations in return. He also blamed Novo Banco for the group’s collapse.
“I don’t understand how Novo Banco could have sold the Moniz da Maia family debt for 10% of its (true) value,” he said.
“We made proposals (to buy the debt) for a greater value (than 10%) several times,” he added, explaining to the MPs that he has offered to buy back the debt for €100 million and have it repackaged to be paid off in 15 years with an offset for more credit from Novo Banco to be able to keep its operations in Brazil going.
Moniz da Maia revealed that the family debt with Novo Banco had reached €368 million (the loan was initially started in 2007 at BES with the acquisition of BCP shares) — this does not include at debt of around €137 million from Ybase Florestal.
The family debt ended up being sold for €6 million in 2019 and was one of the debts included in a debt bundle called Nata II which was brought by the US fund Davidson Kempner after the bank’s losses from the family’s loans had to be covered by the Resolution Fund.
The entrepreneur has laid the blame for the company’s demise at Novo Banco’s door and made clear that the group’s situation was outside the family’s responsibility.
“After the fall of BES, we began negotiations with Novo Banco to maintain our agreements and successfully meet our commitments. We had countless meetings that went nowhere. The reply was always the same — that the Resolution Fund either didn’t reply or wouldn’t approve it,” he said.