The sales process, known as Project Crow, involves the disposal of two recovery funds which own the hotel properties spread across Portugal as well as some development land and other smaller commercial assets including a couple of shopping centres, for a total gross asset value of €1.4 bn. The investors in the two funds are half a dozen Portuguese banks including Caixa Geral de Depósitos, Novo Banco, Millennium BCP but also Santander and Oitante.

Well-informed market sources say roughly 10 private equity firms including Blackstone, Apollo Global Management, Fortress Investment Group, Cerberus Capital Management and Bain Capital are looking at the portfolio, which was officially launched for sale a couple of weeks ago.

According to market experts, the portfolio is likely to sell for a discount but is expected to fetch north of €1 bn, possibly becoming the largest property deal to be closed in Portugal this year. ECS is not being represented in the deal. The bidders are being advised by several brokers including CBRE and JLL.

The hotel properties are all managed by Nau, an operator created by ECS in 2018 to manage the assets. They include the five-star Palácio do Governador in Lisbon and the luxury Lago Montargil & Villas in Alentejo but also several assets in the Algarve such as São Rafael Atlântico, Salema Beach Village, Salgados Vila das Lagoas, Salgados Palace, Morgado Golf & Country Club, Salgados Palm Village Apartments & Suites, Salgados Dunas Suites and São Rafael Suites.

ECS took a stake in the properties following the financial crisis, when the major Portuguese lenders needed to deconsolidate the properties in order to shore up their balance sheets. As a result, the properties were transferred to two recovery funds managed by ECS, with the lenders retaining a stake of less than 20% each. The lenders have since been taking provisions against the assets.