The Bank of Spain has denied NovaCaixaGalicia?s (NCG) request for a 3-month extension to find funds that it needs to meet solvency requirements. BofS plans to pump 2.465 billion euros into NCG. According to sources on the advisory board, the Frob?s intervention will effect a 75% to 85% discount on the bank?s book value, slightly better than was observed when Bankia and Banca Cívica went public in July. The sale price will determine the valuation that BDO is carrying out currently and it is predicted that this will be completed in the next few weeks.
With these steep discounts, the federal government will take between 85% and 91% of the capital of the bank recently created by the lender, to which the finance business has been transferred, and the savings bank will become in trust upon losing control of its banking subsidiary.
Private Investment
Yesterday group leaders explained the project to the federal government. Incoming president José María Castellano?s plan is to see that certain investment funds and private money from the region purchase a stake in the bank at the same price by the end of the year.
