Vale do Lobo’s €500 million financial woes ‘laid bare’

A shocking report exposing the truth behind the ‘glitz’ at Vale do Lobo’s ‘upmarket resort’ will be leaving creditors with increased dispepsia this week. But more importantly it has posed the hitherto ‘unacceptable question’: why has the State turned a blind eye to so much financial mismanagement for so long?

As Observador website explains, the appalling situation at this ‘flagship Algarve golfing destination’ has been compounding since investors – all now connected to various complicated financial probes – began defaulting on massive loan repayments back in 2009.

The picture as of accounts for 2016 show liabilities of “around €500 million” for an ‘asset’ that even on paper is worth considerably less.

Observador puts the value of the resort at €343 million.

Grilled last year over his involvement in conceding Vale do Lobo’s ‘ruinous loans’, former CGD director Armando Vara suggests the value is more like €350 million.

But whatever the sum, there are no investors on the horizon willing to pay that kind of money to bail the resort out.

Observador’s argument is that as financiers CGD should have stepped in to turn this disaster round years ago.

But instead it has been ‘acting’ much more like an owner, and simply putting financial sticking plasters on problems in order to maintain the illusion that all is well.

While the State bank would have been well within its rights to take over Vale do Lobo’s management, it has in fact left the resort in the hands of the very people who took out the ruinous loans.

The result is that “in order to continue operating” Vale do Lobo is now “completely dependent on its main financier, the State bank, which is also a shareholder”.

“Almost every single asset has been used as guarantees and collateral” for both CGD and other banks involved in this mess (BCP and Montepio being two others), to the point that there are even 60 golf buggies in hock for a loan of €500,000.

The solution, says Observador, is to sell – particularly now that the property market is so buoyant.

Could Vale do Lobo have been one of the ‘investments’ President Marcelo talked about with visiting Saudi magnate Alwaleed bin Talal last week (click here)?

It is possible. But why a State bank has been so profligate with the nation’s money is the real question – and so far, no one appears prepared to give an intelligible answer.

A source for Vale do Lobo has been quoted as saying that “a new plan of financial support” is in negotiation, as well as a way of “restructuring current debt”.

But no details are forthcoming.

A source for CGD has told Observador that it is “trying to find solutions that better defend its interests while at the same time attempting to avoid the degradation of assets that are important for economic activity”.

In other words, it is a juggling act on a threadbare tightrope desperately praying that someone runs in with a safety net.


Bearing in mind that Vale do Lobo is technically bankrupt, it is still in the hands of directors connected in some form or other to ongoing high-profile financial probes – not least Operation Marquês, said to centre on millions of euros worth of corruption involving former Socialist prime minister José Sócrates.

Needless to say, Marquês has been running for three years without any hint of when charges will be brought (see below).

But back to Vale do Lobo’s people in charge:

Diogo Gaspar Ferreira – CEO and official suspect in Marquês (click here)

Rui Horta e Costa – director, also an official suspect in Marquês.

Luís Horta e Costa – director, formerly connected to Angolan company Escom (implicated in BES investigation).

Rita Bataglia – daughter of Portuguese-Angolan Hélder, also “in the eye” of the Marquês investigation and probes into alleged mismanagement at BES.

Rita Bataglia took her seat on the board in 2012, says Observador, “substituting Ana Bruno, a lawyer who was involved in the Monte Branco case through connections of her clients to Akoya, the firm suspected of money-laundering”.

Mildly positive note
Described as mildly positive, the company Vale de Lobo, Resort Turístico de Luxo SA posted an operational profit (EBITDA) last year of €862,119 – up from €76,290 posted in 2015. But costs (bank charges and interest on the €388 million owed to lenders) cancel all this out, and bring the declared loss for the year to €16 million.


Charges in Marquês finally have a deadline: November. A statement from the Attorney General’s office has confirmed that the case said to centre on millions of euros worth of corruption and financial skullduggery must be ready with charges by November 20.

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