US equity fund buys troubled Portuguese bank for $1 billion
{{#rendered}} {{/rendered}}Portugal's government is selling the remnants of a bankrupt bank to the U.S. equity firm Lone Star for 1 billion euros ($1.06 billion).
Portugal's Central Bank announced Friday that the Dallas, Texas-based fund is buying 75 percent of Novo Banco. The other 25 percent will be sold later.
The decision did little to quell wider concerns about Portugal's beleaguered financial sector.
{{#rendered}} {{/rendered}}The 1 billion euros will be spent on recapitalizing Novo Banco, the so-called "good" bank salvaged from the 2014 bankruptcy of major lender Banco Espirito Santo. That means other Portuguese banks and the Treasury won't yet — and may never — get back the 4.9 billion euros they lent to Novo Banco.
Bad loans weigh heavily on the country's financial sector, with authorities providing 10 billion euros in aid since 2008.