|
 Prosecutors are preparing to file charges against the billionaire
dealmaker, who they suspect, along with a senator, of trying to
obstruct a long-running graft probe at state-controlled Petroleo
Brasileiro SA, or Petrobras. Esteves, through his lawyer, has denied
the allegations.
In a fresh twist to the near two-year probe, Brazilian newspapers
said police found documents allegedly linking BTG Pactual to the
payment of bribes to ruling coalition lawmakers.
It is the first time the bank, whose public face has for years been
Esteves, was directly implicated in the bribery scandal. Prosecutor
General Rodrigo Janot used evidence and testimony from others under
investigation to persuade the country's Supreme Court to extend
Esteves' detention.
The documents contained information alleging that BTG Pactual paid
45 million reais ($11.7 million) to Eduardo Cunha, speaker of the
lower house of Congress, in exchange for the passage of legislation
favoring the bank, the newspapers said.
BTG Pactual denied the payments in a statement on Sunday and pledged
to cooperate with authorities. A source familiar with the matter
said the revelations and the extension of Esteves' detention
convinced him and his business partners that he had to resign.
GOLDEN SHARE
Esteves still owns over 28 percent of the bank and his stake
includes a so-called golden share which gives him veto rights on any
board decisions.
BTG Pactual named two founding partners, Roberto Saloutti and
Marcelo Kalim, currently the bank's chief operating officer and
chief financial officer, respectively, as co-CEOs.
Persio Arida, who was named acting CEO after Esteves' arrest on
Wednesday, is now chairman, with Huw Jenkins, head of the bank's
international arm, becoming vice chairman.
BTG Pactual has almost 70 partners, including Esteves, who control a
combined 80 percent of the bank's capital, according to bank data.
The new co-CEOs Kalim and Saloutti each have about 5.5 percent.
The main partners, a group of seven executives including Kalim,
Saloutti and Jenkins with whom Esteves founded the bank in 2008, are
considering buying their former leader out, the source said, adding
that Esteves' stake is currently valued at 6.05 billion reais.
Over the past year, Esteves, 47, had steered BTG Pactual through
Brazil's deepest recession in a quarter century. He engineered the
purchase of Swiss private bank BSI Group last year aimed to reduce
BTG Pactual's reliance on Brazil, and invested heavily in global
commodities trading as larger global rivals retreated from the
market.
Shareholder returns long outperformed those of Wall Street rivals
and internally, the longstanding joke has been that "BTG" stands for
"Better than Goldman".
INVESTORS CONCERNED
While Esteves sat in a jail cell in the Bangu VIII prison north of
Rio de Janeiro, the bank's main partners gathered at the bank's
headquarters on Sunday to finalize the sale of a 12 percent stake in
Rede D'Or São Luiz SA, Brazil's largest hospital chain, to
Singapore's sovereign wealth fund GIC Pte Ltd.
[to top of second column] |
The stake will be sold for almost 2.5 billion reais, a source
directly involved in the deal told Reuters. The bank had been
negotiating the Rede D'Or deal since August but Esteves' arrest sped
up talks, two other sources said.
GIC had paid 3.3 billion reais for a 16 percent stake of Rede D'Or
in May.
The new deal could help shore up BTG Pactual's balance sheet after
Esteves' arrest prompted clients to pull over $1 billion in
investments held at the bank's asset management division.
His detention has sent the bank's shares and bonds skidding as
investors fretted about its ability to thrive in his absence.
The price on BTG Pactual's 4 percent bond due in Jan. 2020 rose 0.25
cent on the dollar on Monday to 77.25 cents, yielding 11 percent. A
day before Esteves' detention, the bond was paying 6.8 percent
interest.
Worries about liquidity and funding availability in the wake of
Esteves' arrested led Moody's Investors Service and Fitch Ratings to
put the bank’s investment-grade rating on review for a possible
downgrade.
Heavily dependent on short-term market funding and with about 55
percent of its banking arm's funding due to be refinanced over the
next 90 days, BTG Pactual has sought to assure clients that it is
operating normally.
BTG Pactual's proprietary investments unit, known as principal
investments, also controls over two dozen companies, some of them in
the middle of corporate reorganizations and requiring capital
injections, like drugstore chain Brasil Pharma SA and oil drilling
rig producer Sete Brasil Participações SA.
Another source with direct knowledge of the bank's strategy said BTG
Pactual has stopped offering new loans. Until Friday afternoon,
external funding remained available and stable, said the same
source.
In an e-mailed letter to clients and trading partners on Friday,
Arida said the bank was not a target of the investigation. The bank
also denied on Friday that it was discussing selling itself to Banco
Bradesco SA or UBS AG, as media reported that day.
($1 = 3.8446 Brazilian reais)
(Additional reporting by Roberto Samora in São Paulo and Jeb Blount
in Rio de Janeiro; writing by Carmel Crimmins; editing by Kieran
Murray and Jason Neely)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
