The central bank of Portugal has confirmed that U.S private equity firm Lone Star, has made the most acceptable so far for Novo Banco. The Portuguese bank was rescued from collapse by the government, which counted Banco Espirito Santo (a much larger bank) as one of its casualties. The central bank has invited Lone Star, the Texas based company for further negotiations. The bank stated that other companies are also interested in the lender, and will be addressed if they improve their takeover bids. After the bankruptcy of Banco Espirito Santo in 2014, the Portuguese Treasury gave a bailout of €3.9 billion to Novo Banco. The central bank has been eager to sell-off the bank, but its earlier timeline of September 2015 was frustrated by litigation risks.

The statement which was issued close to midnight, came as a reprieve to the economy, following more than a year of dialogue.  “At this stage in negotiations, the proposal from potential investor Lone Star is the one which most assures those goals but there are provisos, namely the potential impact on public accounts, which we will seek to minimize or remove during the deepening of negotiations which will now commence,” the central bank said. Their priority is to help the country’s financial institution regain composure and restore consumer confidence. Novo Banco was formerly Portugal’s third largest bank in terms of assets and the first choice for corporate consumers. The bank had 8,000 employees operating out of 22 countries. No actual figure has been revealed yet, but analysts think the offer from Lone Starr might be below what it was expecting.