Novobanco shareholders in share capital shakeup

Portugal’s bank Novobanco has informed that it was decided at its general shareholders meeting on Friday to reorganise the bank’s respective capital.

In a communique posted on the securities regulator CMVM website, the bank announced that the shareholders had decided to re-allocate free reserves of €5Bn to “absorb losses”.

According to the bank, the share capital has been reduced from €6.6Bn to €3.2Bn to cover negative results carried forward of €2.870Bn and to beef up legal reserves to €481 million.

Following this reduction, Novobanco’s shareholders will increase the share capital to €3.3Bn by incorporating the special reserve created by reference to the underlying deferred tax assets.

These changes in share capital are accompanied by a reduction in the number of shares representing the share capital which goes from 11,611,327,275 to 500 million.

As announced, the Resolution Fund (which has supplied the bank with liquidity since 2014) has exercised its rights and will be one of the holders of these shares.

Novobanco also underscores that the “reorganisation of the aforementioned capital will not impact its total own capital, it will only eliminate the negative losses accumulated in individual Novobanco accounts and were accumulated during the period that the bank underwent restructuring.”