• Transaction / Assets
    CGD Sells 99% of Vale do Lobo Credits to ECS Fund for €222.9 Million
  • Seller
    CGD
  • Buyer
    ECS Capital
  • € MM
    222.9

CGD Sells 99% of Vale do Lobo Credits to ECS Fund for €222.9 Million

4 January 2018

The bank led by Paulo Macedo sold its credits relating to the Vale do Lobo venture to the restructuring fund ECS in the last weeks of December.

The bank led by Paulo Macedo sold 99% of its credits relating to the Vale do Lobo project to ECS, a restructuring fund led by António de Sousa and Fernando Esmeraldo. The value of the operation amounted to 222.9 million euros. The conclusion of the transaction is still dependent on approval by the relevant authorities.

“CGD confirms that on December 22, it sold its claims on the Vale de Lobo Group for €222.9 million. The acquirer was an investment fund of ECS Capital aimed at intervening in projects in the real estate and tourism sectors,” the state bank told ECO, confirming the report published this afternoon by Expresso. The bank led by Paulo Macedo added that “Caixa expects that this asset can be recovered and monetised.”

Caixa will thus transfer Vale do Lobo’s loans to an ECS fund that already has other properties, such as the Torres de Lisboa and the new building in Fontes Pereira de Melo. Under this operation, ECS will issue units that will be subscribed by CGD itself and will, in practice, finance ECS’s acquisition of the asset. Another of the creditors, Novo Banco, only had a minimal amount of residual credits, but sold them together with CGD, according to ECO.

BCP – Vale do Lobo’s other relevant creditor – has reached an agreement with the fund. The bank led by Nuno Amado also decided to sell all the credits it held to ECS.

According to the source close to the process, “ECS is prepared to keep the asset between five and six years. Or longer, if need be.” The same source also told ECO that a restructuring that would lead to the dismissal of workers is not expected. The opposite may be the case: “Just as was the case with other assets that ECS has acquired, such as the Salgados (Algarve), we have even hired new employees,” he added.

Despite being a long-term investor, which seeks to restructure assets to capitalise them after a few years, the fund led by António de Sousa and Fernando Esmeraldo has already sold eight of the assets it acquired, namely two in Madeira, two in Lisbon and one in Porto. These were accelerated divestitures due to an improvement in the economic environment, according to the source.

Original Story: ECO – Economia Online – Rita Atalaia / Mónica Silvares

Translation: Richard Turner