Algarve’s International Autodrome is to be taken over by the State-owned Portugal Capital Ventures, Sociedade de Capital de Risco, S.A., which has acquired Parkalgar Serviços S.A., the racetrack owner.
A formal document released by the Autoridade de Concorrência, the competition authority, which overlooks takeovers of this nature, stated: “Portugal Capital Ventures has acquired exclusive control over Parkalgar Serviços SA and consequently gains sole control over assets that make up a commercial establishment located in Portimão.”
The “establishment” comprises the Algarve International Autodrome, the kart circuit and the off-road circuit.
Portugal Capital Ventures is now awaiting the approval from the competition authority.
The Algarve International Autodrome has been a stage for many of the world’s most prestigious races. Receiving such events as the Superbike World Championship, the International GT Open and the Superstars International Series, the track has proved itself as a top-class circuit. Not even these events, however, could keep the management of the racetrack from near ruin.
As reported in the Algarve Resident edition of June 22 2012, Parkalgar had announced that a special revitalisation programme (Processo Especial de Revitalização de empresas, or PER) had been initiated to ensure the company’s future and the viability of its projects under the current economic and financial crisis.
The company said that the programme was made viable by its two main creditors, Millennium BCP and Bemposta – Empreendimentos Turísticos do Algarve, SA.
“Parkalgar has begun negotiations with its creditors to ensure its revitalisation and, through the PER, secure solid foundations for the financial stability of its overall project, which includes investments being made for the conclusion of tourist apartments and a hotel as well as vital projects set out in the initial strategy of the company.”
Before, in late May, CEO of Parkalgar, Paulo Pinheiro, said that an agreement had been reached with a consortium that had demanded the insolvency of Parkalgar for the lack of payment of a €1.6 million debt.
“We reached an agreement over this last instalment owed to the consortium,” Pinheiro said, adding that the request for insolvency by the consortium, made up of companies Siemens, Ensul Meci and SPIE, was a way of “exerting pressure” on Parkalgar.
The three companies were responsible for the electrical infrastructures at the racetrack and adjacent land, where the Technology Park is sited.
Later, in November 2012 (as reported in the edition of November 30 2012), Parkalgar was saved from insolvency when the court in Portimão approved a financial restructuring plan which waived €40 million of its €160 millionaccumulated debt as a counterpart for the company carrying out layoffs and selling assets.
BCP bank and construction company Bemposta held over two thirds of Parkalgar’s debt and were required to accept the plan in order for it to be put into effect.
As a result, BCP dropped its demands from €117.4 million to €94.3 million while Bemposta kept its debt at €10.3 million.
However, the procedure did not keep the racetrack or Parkalgar from falling into the hands of the government.
With the foreseeable approval of this operation, the debts of Parkalgar will become the debts of the government and of its company Portugal Ventures, which will be taking on the responsibility of handling the company’s delicate financial situation as well as managing the structures of the Algarve circuit.
Founded only in June 2012, the State-run company describes itself as “a private equity firm, focusing its investments in innovative, scientific and technology-based companies, as well as in companies from the more traditional Portuguese tourism and industrial sectors with significant competitive advantages and export-oriented”. It also considers its activity “an active partnership based on capital investment and management support, focused on sales growth and the creation of value for the shareholders through a successful Trade-Sale or IPO of our portfolio companies”.
It is controlled by the support institute for small and medium-sized enterprises IAPMEI (Instituto de Apoio às Pequenas e Médias Empresas), which falls under the responsibility of the Portuguese Ministry of the Economy.