Lone Star says IPO for Novobanco to advance in coming months

It seems it is decided. Novobanco is now not likely to be sold or merged with another bank, either national or international.

Instead, Lone Star, the US asset management fund that is the bank’s largest shareholder, has given a “formal indication” that Novobanco will be prepared for a floatation on the Euronext Lisbon stock market.

The official confirmation was given on Thursday in a note sent to the market.

According to the bank, Nani Holdings (75%) has given “a formal indication” too begin the process for an Initial Public Offering (IPO), meaning the bank’s capital will be disbursed on the stock market in the form of shares under terms agreed with the shareholder.

The process for implementing the IPO will be undertaken over the next few months and the decision has been imparted to the Resolution Fund (Set up to maintain the bank’s capital ratio levels) and the Portuguese State via the General Directorate of the Treasury and Finances.

Nani Holdings is the vehicle through which Lone Star controls 75% of the bank’s capital, a bank that was created in 2014 after the collapse of Banco Espírito Santo.

On Wednesday, Bloomberg reported that Novobanco has chosen the Bank of America, Deutsche Bank and JPMorgan Chase to handle the operation, although other banks could also be called upon to assist in the process.

The decision follows the early termination of a contingent capital agreement in December, a process which freed up €1.3Bn in dividends and paved the way for Lone Star to advance with the process of selling or floating the bank