Portugal puts up $6.6 BN to save ailing bank

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Associated Press

Posted on August 3, 2014 at 10:00 PM

Updated Monday, Aug 4 at 12:02 AM

LISBON, Portugal (AP) — Portuguese authorities are provide providing 4.9 billion euros ($6.6 billion) in an emergency rescue to prevent the collapse of ailing bank Banco Espirito Santo, one of the eurozone country's oldest and biggest financial institutions.

Bank of Portugal governor Carlos Costa said late Sunday the bank's healthy businesses will be spun off and its toxic assets will be placed in a so-called "bad bank."

The move came after Banco Espirito Santo's share price lost around 75 percent of its value last week. The stocks crashed after the bank reported a record half-year loss of 3.58 billion euros.

The bank is at the heart of the Espirito Santo family's tourism-to-health care business empire on four continents.

The scandal erupted after an audit found accounting irregularities and huge unreported debts at the bank.

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