Espírito Santo in Downward Spiral as Shares Are Suspended
Source: Wall Street Journal
One of Portugal's leading financial institutions is in a tailspin, a descent that started late last year when questions first arose about accounting irregularities at its parent company.
Shares in Banco Espírito Santo SA BES.LB -17.24% were suspended from trading Thursday after falling another 17%. Shares of the lender's controlling shareholder, Espírito Santo Financial Group SA, were also suspended "due to ongoing material difficulties" at its parent company. This week's downward spiral has knocked 32% off the bank's market value and has dragged down Portugal's main stock index with it.
On Thursday, the turmoil spread to elsewhere in Southern Europe, illustrating how investors remain nervous about the fragility of the continent's financial system. In Spain, a bank and a construction company each called off planned bond sales. An Italian drug company pulled its stock offering. A Greek government bond sale came in smaller than expected. Stock markets across the continent fell, along with the euro.
Espírito Santo's woes date back to last December, when The Wall Street Journal first reported on concerns about the way the companies' ultimate parent—a multi-industry conglomerate called Espírito Santo International SA—was raising funds and valuing certain assets.
Read more: http://online.wsj.com/articles/espirito-santo-financial-group-suspends-trading-in-own-shares-1404985316
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