State could become Novobanco’s second largest shareholder, with more than 15% of the capital – Banking & Finance

Novobanco’s annual General Meeting is scheduled for this Friday, and among the main points on the agenda is the decision on yet another conversion of tax credits that will ultimately result in a reinforcement of the State’s direct position, now to more than 15%, thus becoming the bank’s second largest shareholder, ahead of the Resolution Fund, advances Jornal Económico.

This is because the Resolution Fund, which is financed by Portuguese banks but is under the authority of the Public Administration, will once again dilute its participation shareholder in Novobanco.

The agenda of this Friday’s General Assembly includes a deliberation “on the proposal of the Executive Board of Directors to adjust the number of conversion rights attributed to the State for the year ending December 31, 2020, following the correction of the amount of tax credit from the Tax Authority”.

Carrying out a new conversion of tax credits, issued under the special regime, will result in the State reinforces its direct position in Novobanco from 11.96% to 15.6%. This is due to a reduction in participation in the Resolution Fund to 9.45%.

Novobanco plans to hand over 3.64% of the capital to the State, which will only dilute the Resolution Fund’s participation if shareholders do not exercise the potential right to acquire conversion rights. The value of the new capital increase that accommodates the new tax credit conversion is not yet known.