State gives 'green light' to the sale of 15% of Unitel's shares in BFA in a public offering.

If completed, the sale will reduce UNITEL's stake in the bank to just 36.9%, due to the sale on the stock exchange of 15% of the total shares held by the operator.

The Angolan State approved, through a Presidential Decree, the sale of 15% of Unitel's shares in Banco de Fomento Angola (BFA), an operation that must be carried out through an initial public offering (IPO), according to a Decree, published in the Official Gazette of the Union and cited by the national press.

According to the operation strategy, the business follows the privatization calendar, that is, the privatization program carried out by the Angolan Executive.

Therefore, if completed, the sale will reduce UNITEL's stake in the bank to just 36.9%, due to the sale on the stock exchange of 15% of the total shares held by the operator.

BPI shareholder follows ECB guidance

In compliance with a measure from the European Central Bank (ECB), Banco Português de Investimento (BPI) will sell, through an Initial Public Offering (IPO) on the stock exchange, 15% of the share capital it holds in Banco de Fomento Angola (BFA).

Following what was reported by the Portuguese press, to prevent the entity from becoming the majority shareholder of BFA, after the sale, BPI will follow Presidential Decree 194/24 of 23 August, published in Diário da República to sell part of the its share capital, via the stock exchange.

With the sale of another 15%, after selling 2% in 2014, the bank will have a smaller stake of 33.1%. 10 years ago, the Portuguese owned 50.1% of BFA shares.

The deconsolidation of BFA into BPI allowed the bank not to exceed the limit of major risks imposed by the ECB in 2014.

As we know, taking into account that currently 48.1% of BFA's capital belongs to BPI, becoming the largest shareholder of the Angolan bank, which goes against the recommendation of the European Central Bank and would imply a change in the way in which results are consolidated. from BFA.

In 2019, BPI decided to change the consolidation method of Banco Fomento de Angola (BFA) as a matter of “prudence”, and the Portuguese bank started to record in its accounts only the profits distributed by the Angolan bank.

Therefore, the financial institution was no longer considered an “associated company”, consolidated by equity equivalence, to be classified as a financial investment in “shares at fair value for other comprehensive income/OCI”, as the bank explained at the time.