The State has already recovered 411 million euros from the guarantee given to Banco Privado Português (BPP) and should recover the entire amount, according to the latest report from the Liquidation Commission, to which Lusa has had access.
According to the report submitted to the court for June 2023, 410.9 million euros of the state’s guaranteed credit of almost 447 million euros has already been paid. As for the rest, the Liquidation Commission says that the liquid and liquidated assets should be worth 230 million euros and that a significant part of this is for payment of the State’s credit.
Thus, it seems “very likely that the guaranteed credit will be paid in full (in terms of capital)”.
In March, the Liquidation Commission told Expresso that the amount it receives from the transfer of the works of art from BPP to the state will be used to pay off the state’s guaranteed debt of 450 million euros (referring to a loan from several banks to BPP that the state guaranteed).
As for the default interest to be paid to the state, the report estimates that “it will be partially paid”. The interest on arrears (guaranteed by the liquidity generated by the assets given as a counter-guarantee to the state) amounts to 160 million euros.
As for the common claims – amounting to 944 million euros – 185 million euros have already been paid to creditors by the Deposit Guarantee Fund and the Investor Compensation Scheme. According to the Liquidation Commission, it is not possible to know what proportion will be paid out.
Of the subordinated loans of 222 million euros, the report states that it is “all too clear that it will not be possible to make any payments”.
The report also reveals the financial situation of BPP – in liquidation. At the end of June 2023, net assets amounted to 224 million euros, while liabilities amounted to 1,265 million euros, resulting in a negative net balance of 1,041 million euros.
Also in the first half of the year, it had costs of 3.1 million euros (of which 1.3 million euros were personnel costs) and income of 2.7 million euros (mainly from interest on cash investments and reversals and recovery of impairment losses), resulting in a loss of 400 thousand euros. It had 27 employees.
Regarding the management that has been carried out to recover assets for the insolvent estate and to be able to pay creditors, the Liquidation Commission speaks of the “complexity” of the liquidation, which is highly contentious. BPP is party to 43 active lawsuits, which – it warns – “does not allow us to predict the timing of the end of the liquidation”.
The organization says it is willing to resolve some of these cases by agreement – which are “significant in number” and with the “normal delay and complexity inherent to them”, as long as this “does not jeopardize the interests of BPP and its creditors”.
“This is a path that, in some cases, in addition to avoiding an obvious saving of the insolvent estate’s resources, could shorten ongoing proceedings or even, as has been said, prevent them from even being started,” he points out.
Regarding the sale of properties where BPP’s offices are located, the Liquidation Commission told Lusa that the building on Rua Alexandre Herculano, in Lisbon, was recently sold for five million euros. The sale of the head office, in Rua Mouzinho da Silveira, Lisbon, will be completed within two years, according to the promissory contract. The value of the latter sale has not been disclosed (according to the newspaper Expresso, it is four million euros).
The collapse of BPP, a wealth management bank, began with the 2008 financial crisis and culminated in its liquidation in 2010. Despite the bank’s small size, BPP’s bankruptcy harmed thousands of clients and the state, and led to fears of contagion to the rest of the system when there was a financial crisis.
In December 2008, faced with a lack of liquidity, the Bank of Portugal appointed a provisional administration for BPP and six banks lent 450 million euros (CGD, BCP, BES, Santander Totta, BPI and Crédito Agrícola) in exchange for a state guarantee.
The founder and former chairman of BPP, João Rendeiro, sentenced to prison for crimes related to BPP, died on May 12, 2022 in a prison in South Africa, where he had been since December 11, 2021, after three months of evading Portuguese justice to avoid serving time in Portugal.
