Quinta do Lorde debts
Hot on the heels of the Madeira Regency Palace debacle comes the latest details of the financial plight of anther tourist development which has been struggling since its inception. The Diario yesterday reported on Quinta do Lorde, located in Canical as you head out to Ponta de São Lourenço, having a total of 90 creditors being owed a combined €114 million. Banks lead the list of creditors with Novo Banco in the headlines again, owed €48 million, and BPI €44 million. Also figuring highly in the list of claimants is the de Sousa family, who have been instrumental in this project from the start, and the construction company Tamega, which the Diario speculates is also in difficulties.
The most recent developments with this ill-fated project have been covered on the blog earlier this year, in April and May, and a search in the box on the right-hand sidebar brings up many more references.
With Novo Banco being involved with both the Madeira Regency Palace and Quinta do Lorde, it has to be asked what these debts are still doing on their books. When BES was rescued last August, Novo Banco was supposed to emerge as the “good” bank, whilst all of the risky “bad” debt was transferred to the Bank of Portugal.
Now Bank of Portugal is owning up to there being problems resulting from the decision to keep certain loans at BES when the broken bank was divided into two parts. They are currently trying to offload Novo Banco, but the three buyers that are interested have offered amounts varying between €3 billion and €4 billion, well below the €4.9 billion needed to pay back the money advanced by Portugal’s banks and taxpayers during the rescue. There are now also several lawsuits in progress’ subsequent to the botched rescue of BES, and the Bank of Portugal has admitted that ‘there may be hundreds of millions of euros payable to creditors,’ including Goldman Sachs, New Zealand’s state pension fund and 2,500 individual depositors. The legal processes may drag on for years, and in these uncertain circumstances bidders for Novo Banco have gone in low and may not raise their bids as Bank of Portugal had hoped – they are hoping to conclude the sale at the end of this month.
Still on the subject of debt, the Diario yesterday also reported that the total public debt of the Autonomous Region of Madeira was €6,149 million as at December 31, 2014, according to figures presented to the Regional Legislative Assembly. Whilst this does seem a lot for a small island, it is heading in the right right direction – €487 million less than at the end of 2012, and €211 million less than the same point in 2013. Steady progress considering that public spending continued largely unabated during this period.
Madeira Regency Palace latest
Approaching 100 “Comments” and updates on the closure of the Madeira Regency Palace continue to accumulate on a previous post: http://madeiraislanddirect.com/blog/2015/04/regency-palace-hotel-to-close/#comment-211171
The photo below is representatives of the hotel workers union, Sindicato da Hotelaria, protesting in Funchal last week. From the comments posted, there appears to be two main themes developing: The first is the lack of communication from the administrator to the members; the second questions the legality of the Madeira Regency Palace timeshare sales, particularly “flexiweeks”.