Espirito Santo Financial Group files for bankruptcy after Luxembourg court denies protection request

 
Michael Bow
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The former chairman of Espirito Santo, Ricardo Espirito Santo Silva Salgado
One of the groups behind bailed out Portuguese lender Espirito Santo has filed for bankruptcy after it was denied protection from creditors.

Espirito Santo Financial Group (ESFG), which once owned 25 per cent of the main banking group Espirito Santo, was denied protection by a court in Luxembourg last Friday alongside its subsidiary Espirito Santo Financiere (Esfil) .

“These resolutions follow the decisions of the Luxembourg district court sitting in commercial matters on 3 October 2014 to turn down ESFG’s and Esfil’s applications for controlled management,” the firm said in a statement yesterday.

It added that its board of directors had decided to seek bankruptcy in a court hearing in Luxembourg today.

Espirito Santo International and Rio Forte Investments, two other units involved in Espirito Santo’s complex ownership structure, are still seeking creditor protection.

Espirito Santo had to be bailed out by Portuguese regulators in August after its main parent company, Esp­irito Santo International, hit troubles.

Regulators moved the healthy bits of the bank into a so-called good bank, renamed Novo Banco, which is a nationalised entity.

The bank’s former chairman, Ric­ardo Espirito Santo Silva Salgado, stepped down in July from the group after the bank hit the buffers.

ESFG owned a quarter of the main Espirito Santo bank and was itself half-owned by Espirito Santo Irmaos, which was in turn 100 per cent owned by Rio Forte, owned by Espirito Santo International.

The main holding company sitting atop the structure was called Espirito Santo Group.

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