Resolution Fund questions Novobanco over the sale of the former Benfica president’s hotel in Brazil

  • ECO News
  • 15 September 2022

Novobanco wants to sell the former Sheraton Reserva do Paiva to Meliá, but operation needs the green light from the Resolution Fund, which has requested further clarification on the deal.

The Resolution Fund asked Novobanco the clarify the sale of a hotel in Recife that belonged to Luís Filipe Vieira’s business group. The tender for the sale of that hotel unit raised the interest of several candidates, and, although, there is still no official decision, Novobanco will choose the Spanish chain Meliá Hotels International to the detriment of the Vila Galé Group, which came to be ahead in the auction. But the operation still needs the green light from the Resolution Fund because this venture covers the €3.9 billion public guarantee associated with the sale of Novobanco to Lone Star.

An official source from the Resolution Fund told ECO that “Novobanco sent the request to authorize the operation in question to the Resolution Fund during August, and the conclusion of the analysis is dependent on clarifications requested in the meantime from Novobanco.”

Last year, the Special Alternative Investment Fund (FIAE) Promotion and Tourism, held by Novobanco, received the real estate assets of Luís Filipe Vieira’s company Promovalor. In total, there were 23 real estate assets in Portugal, Spain, Brazil and Mozambique, with a commercial value of over €244.3 million, including a hotel in Recife, Brazil, the former Sheraton Reserva do Paiva.

The hotel was built by Promovalor and Brazilian Odebrecht and was operated by the Marriott International Group from 2014 until the summer of 2020, when it closed its doors due to the pandemic. However, in 2021, it became Novobanco’s responsibility as a guarantee for the debts left to the bank by Promovalor.

Last year, C2 Capital Partners, manager of the FIAE fund, launched a tender for the operation of this hotel, having received eight proposals, as reported before by Jornal Económico. At that time, one of the proposals received was from the Vila Galé Group and was even the “best classified”. However, the operation needs the “green light” from the Resolution Fund, Novobanco’s public shareholder and the entity responsible for managing the guarantee of €3.9 billion to cover losses from the bank’s toxic assets.

Novobanco decides to review proposals from interested parties

Since the summer of last year, the Vila Galé Group had been waiting for the green light from the Resolution Fund, having even put forward projects for that hotel, as the people in charge of the hotel chain have said several times to the Portuguese and Brazilian press. The exploration of the former Sheraton Reserva do Paiva was, therefore, already taken for granted by Vila Galé.

However, Novobanco decided to review the tender’s conditions by giving interested parties the possibility to improve the offers that they had initially presented, ECO knows. With this, Meliá Group decided to raise its proposal and surpassed the one sumitted by Vila Galé Group.

Although there is still no official decision, ECO has learnt from sources close to the process that Novobanco will, of course, award the operation of that hotel unit to Spanish company Meliá – which already has 12 hotels in Brazil. One of the points taken into account was the value requested by hotel chains to operate the hotel. In this case, the most advantageous proposal for the bank was the one that asked for less money from the fund.