ESFG, controlled by Portugal’s Espirito Santo family, will exercise its right to buy most of the stock in the share sale, meaning its 27.4 per cent holding will be diluted less than expected.
Shares in Banco Espirito Santo rose 7.4 per cent to €0.94 yesterday. In February, the lender posted an annual net loss of €518m and warned that the prolonged downturn in Portugal could leave it in need of fresh capital.
The bank said in its rights issue prospectus last week that financial irregularities had been uncovered by an audit at Espirito Santo International, which controls ESFG.
Around 200 institutional investors are reportedly being targeted in the roadshow to find other buyers for the rights issue. Credit Agricole, another major shareholder, is expected to see its holding reduced from 20 per cent to around 15 per cent following the share sale.
Separately, ESFG yesterday posted a first-quarter net loss of €37m, mostly due to provisions and impairments, after a loss of €13m a year ago.