Lone Star Funds has been selected by Portugal’s central bank as the best-placed bidder to conclude talks on the purchase of Novo Banco, the lender that emerged from the breakup of Banco Espirito Santo.

The European Central Bank has ordered Portugal’s Novo Banco to fill a €1.4bn hole in its finances, possibly delaying its planned sale and hampering Lisbon’s efforts to draw a line under its biggest banking collapse.