Portugal moves to Plan B in effort to sell rescued bank after talks with 1st bidder collapse

Economic IndicatorsAssociated Press

Portugal is having trouble selling Novo Banco, the so-called good bank salvaged from last year's collapse of major lender Banco Espirito Santo.

The Bank of Portugal said Tuesday it had missed its own Aug. 31 deadline for the sale after failing to reach agreement with a potential buyer, which it didn't identify.

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The central bank said in a statement it was starting talks with another bidder, also unnamed. It said a third bid remains on the table.

Novo Banco received 4.9 billion euros ($5.5 billion) from a so-called bank resolution fund, a mechanism adopted during the eurozone debt crisis to support the financial sector.

The Portuguese Treasury provided 3.9 billion euros of that, with other Portuguese banks providing the rest, and those lenders want to recoup their money.