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Portugal/Angola: BPI’s Angolan dilemma

The Angolan government wants foreign companies to divest part of their stakes in their subsidiaries to the country’s wealthiest companies as part of its strategy to localize key assets.

Fernando Ulrich, BPI

"Sonangol is playing the role of a sovereign wealth fund because, being the oil company, it is the place where capital is accumulated"
Fernando Ulrich, BPI

This might be bad news for Banco Português de Investimento (BPI), which owns 100% of Banco Fomento Angola – the most important private bank in the country. BFA is the biggest of a handful of Angolan subsidiaries of Portuguese banks. BFA also has the biggest deposits of any bank in the west central African country.

Fernando Ulrich, chief executive of BPI and chairman of BFA, tells Euromoney that negotiations to sell 49% of his Angolan business to Sonangol, the national oil company, will probably be completed within the next few months. "Sonangol is playing the role of a sovereign wealth fund because, being the oil company, it is the place where capital is accumulated," says Ulrich. Sonangol already has a large stake in Portugal’s Galp energy corporation. It is also rumoured to have its eye on two flagship companies on the Lisbon stock market.

Uncompetitive bidding

Some market observers reckon that BPI is hoping to get €800 million from the sale, although one Portuguese banker says Ulrich might have to settle for less than half that amount, in part because of an uncompetitive bidding process.

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