Chinese conglomerate Fosun will become the biggest shareholder in the ailing BCP, Portugal's biggest private bank, by agreeing to buy a 16.7 percent stake, the two sides said Sunday.

Fosun is paying nearly 175 million euros ($185 million) via a capital increase after an agreement reached on Friday. 

Portugal's banking sector is saddled with debt and bad loans and had to be rescued twice by the state since 2014.

Fosun said it aims to increase its shareholding in BCP to around 30 percent. 

"The transaction is expected to extend the group's international network and help the group enter the Poland, Mozambique, Angola and Switzerland financial markets rapidly," Fosun said in a statement. Mozambique and Angola are former Portuguese colonies.

Angola's state oil company Sonangol was up until now the largest shareholder in BCP with a stake of 17.84 percent, followed by Spanish bank Sabadell with 5.07 percent. 

But after the dilution of BCP's existing capital Fosun will become the largest shareholder with its 16.7 percent stake.

Fosun, China's largest privately-owned conglomerate, is already present in Portugal with stakes in the insurer Fidelidade and medical services group Luz Saude.

Last year the company made a bid for Portugal's Novo Banco, which emerged from the 2014 rescue of Banco Espirito Santo. 

But its offer was judged too low by the Bank of Portugal, which decided to relaunch the sale process this year. Fosun did not bid again.

BCP's share price has been under pressure since early June amid investor concern about capital weakness.

The bank announced a third-quarter loss of 53.8 million euros, due to an increase in provisions for bad debts. BCP posted a net profit of 23.8 million euros in the same period a year ago.

Like other Portuguese banks, BCP has been trying to boost capital as it addresses regulator's requests and the burden of non-performing loans.