A quick and short blog, as close sources report (and the Diario today confirms), that the the Regency Palace could well close within the next fifteen days according to an application made in in the Judicial Court of Funchal. The hotel has been labouring under serious financial problems for a number of years (including €16 million of social security debts – see previous blog). The final move, apparently out of the blue, seems to have been made by the two main creditor banks, Novo Bank (formerly BES), which is owed €23 million, and Millennium BCP (€16 million), jointly taking action against the the two companies involved in managing the Regency Palace “Hotelmar” and ‘Cunha Santos & Camachos SA’. It must be emphasised that whilst there are also similarly named establishments, specifically the “Regency Club” and the “Regency Cliff” hotels nearby, these operations are completely independent, with the three hotels ceasing any connections many years ago.
Commentators seem to be undecided whether this will result in a restructuring of the debt and renegotiation of employee contracts, or the complete closure of the facility. Apparently the unit, which employs 110 staff, is running at 80% capacity at the moment. The Regional Secretariat for Economy and Tourism has been closely involved in talks today in an attempt to find a solution.