By Andrea Hargraves 
In an interview with Antena 1 / Negócios on the Conversa Capital program, Novo Banco CEO said, regarding the credit recovery questions, he had managed to recover some assets.
“If the Assembly of the Republic is having difficulty notifying the people, do you think that it is easy to discover the assets? Will I harm the settlement fund and the Portuguese because of that?”, He began by asking Antonio Ramalho, referring to the letter of the head of the Parliamentary Committee to investigate the new bank, Fernando Negrao, who It was at a recent hearing that he had not been able to contact two of Novo Banco’s big debtors: Nuno Vasconcelos of Ongoing and Prébuild’s owner, João Gama Leão.
“What I will try to do is get the most out of my recovery,” said Novo Banco CEO.
The bank “in many cases made a refund. “He recovered the planes and yachts,” said Antonio Ramalho, without specifying that these were the goods Bernardo Muniz da Maia obtained by donating funds to Sogema.
According to the Corio da Manha report, Bernardo Muniz da Maia was arrested by Novo Banco for booking a yacht and plane worth 37 million euros, in 2016, due to lost debts from Sujima.
However, Sogema’s debt ended up leaving Novo Banco in 2019, after it was sold in NPL’s portfolio called Nata II (mainly made up of debt from single-name debtors) to Davidson Kempner’s fund.
Bernardo Muniz da Maya is a major debtor of Novo Banco who will be heard by the Parliamentary Inquiry Committee of Novo Banco this Friday, April 30th, at 2:30 pm.
The CEO of Novo Banco faced in the interview the information that Deloitte disclosed in its report, regarding the audit committee’s opinion on the Nata II portfolio, which indicated, in a public memorandum on exposure to debtors, that “there have been cases of heavy losses of o Novo Banco due to cases of management Harmful and deliberate placement of assets from the debtor’s assets to impede any opportunity to recover credit or blatant commercial bad faith. “
The Opinion also stated that, in these cases, “if there are factors that clearly indicate unlawful behavior or behavior intended to harm Novo Banco, they should consider the possibility of initiating criminal proceedings or civil liability claims against the perpetrators. Heavy losses in the institution.
According to Deloitte, “In this context, on February 14, 2020, the Settlement Fund requested via a letter sent to Novo Banco to express its opinion and to proceed with the necessary investigation regarding this matter identified by the Monitoring Committee.”
“There were no formal communications in response to the decision box in this context. According to the clarifications provided by Novo Banco, this matter was followed up with the oversight committee,” according to Deloitte’s report.
Antonio Ramalho answers that the bank has 90,000 lawsuits, administered with “stringency” and “flogging”.
“Those who know how difficult this is.” Ramalho, who admitted that among the managers who have fallen victim to these threats from defaulting debtors, within their scope, revealed that they do not perceive the calls, threats and the use of less legal means against the managers who lead this process: credit recoveries.
Novo Banco’s CEO does not consider that he has accelerated asset sales (NPL – Non-Performing and Real Estate) and reiterates that despite this, he has always done his best and followed all Resolution Fund recommendations. It also refuses to expose the bank to any harm, while remembering that the transactions are authorized by the settlement fund.
The Deloitte Report reports on the opinions and sales of Nata II where “single names” were
In accordance with the context of the CCA (Contingency Capitalization Agreement) and the inherent service agreement between Novo Banco and Resolution Fund, in a letter dated September 12, 2019, Novo Banco requested permission from the Settlement Fund to sell CCA assets included in the NATA 2 portfolio. The purchase and sale agreement between Novo Banco stipulated And Davidson Kempner, on a precondition for the completion of the deal, is not to oppose the Settlement Fund until the October 31, 2019 deadline.
The opinion of the Follow-up Committee was issued on October 18, 2019, and it was sent on the same day to the Settlement Fund.
It should be noted that on the recommendation of the Settlement Fund, Novo Banco withdrew the credits from six economic groups from the Nata 2 package.
The Resolution Fund recommended Novo Banco to consider strengthening the exclusion of an asset sale for which the buyer offered a price of zero.
Exposures under which the settlement fund requested exclusion of the transaction correspond to the cases specified by the oversight committee in its opinion and refer to the appropriations that, either because of discrepancies between the total book value and the offered price (3 cases), or by excluding discrepancies between the net book value and the offered price (3 cases). Two cases), or discrepancies between the price offered by the buyer and the economic value of previous sales proposals (one case), from NAT2.
According to Deloitte’s report, according to the Oversight Committee, if the sale of the portfolio had been extended for a longer period, “other exclusions could have been realized with the benefit of Novo Banco, with the interest shown by some investors in anticipating the binary of negotiations by including it in the periphery of the portfolio.”
The Settlement Fund, after excluding Nata II credits, requested Novo Banco to present a “rationalized and structured strategy to recover the credits that would be excluded from the transaction, with the aim of pursuing the objectives of minimizing exposure to NPLs from where they were more in line with the objective of maximizing value”.
The report also states that at the meeting held on November 6, 2019, the Executive Committee (CAE) learned that the Conditional Settlement Fund was not opposed, and on November 14, 2019, the new bank informed the Fund that the buyer was on the conditions and the two parties were coordinating the financial settlement of the process considering the exclusion of the six economic groups. .
Regarding the exclusion of the assets for which the buyer offered a zero price, according to clarifications from the bank to Deloitte, the matter was discussed with the buyer, “However, Novo Banco decided not to proceed with additional exceptions for the perimeter in order to avoid potential sources of litigation due to commercial bad faith, With the exception of an economic group (corresponding to a credit agreement) excluded on the closing date (April 2020), whose price agreed with the buyer was zero and recorded a net book value of 329,864 euros.
“It should be noted that there is no evidence of written communication to the Settlement Fund regarding follow-up and the outcome of the approach with the buyer regarding these potential exclusions (the latter became informally informed in the context of regular communications between the parties),” he tells Deloitte.
“It appears that contacts have been established between Novo Banco and the Resolution Fund to provide rational recovery strategies for all economic groups excluded from the deal,” he explains.
The exceptions provided by the Settlement Fund for the six economic groups included reducing the range to 45 economic groups, consistent with the exclusion threshold stipulated in the purchase and sale agreement. As mentioned earlier, excluding economic groups above this limit may result in the deal not being completed.
The final perimeter of the Nata II approved portfolio for sale which includes the purchase and sale agreement with Davidson Kempner 51 included an economic group, with a total book value of 1804.8 million euros and a net book value of 297.7 million euros. However, as a result of the exceptions made in 2019, after the settlement fund’s non-objection declaration, the sold portfolio consisted of 45 economic groups, equivalent to a total and net book value of 1,454.2 million euros and 241.9 million euros, respectively.
Deloitte also states that “It should be noted that the final ocean also included related assets, ie equity instruments, debt securities and even property, whose net book value corresponds to about 2.5% of the ocean’s total net book value”.
According to the clarifications obtained from Novo Banco, it appears that in terms of net book value, 96% of economic groups correspond to exposures whose entry date is BES / Novo Banco prior to August 2014.
Novo Banco responded to Deloitte’s note that she had been advised to sue the debtors before selling the credits in bundles (Nata II), by the Novo Banco Control Committee, but the management ended up not doing so and opting to sell those credits, with losses.
According to Novo Banco, the purchase and sale agreement did not stipulate that the financial institution could initiate criminal proceedings and / or civil liability actions related to the exposures sold in the Nata II portfolio after the sale, “passing this decision to the buyer.”
On the other hand, “the results of lawsuits regarding the exposures included in the transaction that were in progress on the date of the sale will be fully owed to the buyer, and this is a weight factor and is reflected in the proposed purchase price,” reads in the Deloitte report.