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China’s Fosun Buys 16.7% Stake in Portuguese Bank Millennium BCP

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Portugal’s largest listed bank Millennium BCP has accepted a 16.7 percent share purchase from Fosun, a Chinese conglomerate. Fosun made a subscription of 157,437,395 new BCP shares at a price of 1.1089 euros, for a total spend of €174.6 million. The deal was made with the guarantee that the stake would eventually be increased to 30 percent. The Portuguese banking sector is yet to recover from the difficult situation within the EU in general, and the bailouts given in 2014 and 2015. Millennium BCP investors have been on edge as the bank has struggled with debts and bad loans. This new offer will increase the bank’s capital and put it in a better position going forward. Fosun’s offer was initially made in July. BCP signed a memorandum of agreement with Fosun, in which the firm agreed that it “expresses strong interest to subsequently raise its shareholding in BCP to around 30 percent”.

While that is being prepared, BCP will have a meeting with shareholders to change the stakeholder’s voting rights from 20 percent to 30 percent. The shareholder meeting which was to take place on Monday has been moved to December 19th. Fosun’s purchase will make it the largest shareholder of Millennium BCP, after the dilution of capital. Sonangol, the state oil company of Angola, was previously the largest shareholder, with a 17.8 percent stake. Next up was Sabadell, the Spanish bank, which holds 5.07 percent. The Chinese firm is already a major investor in Portugal, having acquired Fidelidade, Portugal’s largest insurer, in 2014. Fosun and BCP will also engage in insurance operations outside Portugal. BCP already has operations in Angola, Poland and Mozambique.

 

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