Caixa Geral de Depósitos has rejected a rescue deal for the Keys, based at the Quinta do Lago estate.
The taxpayer-owned bank is owed €278 million but has concluded that it was not worth agreeing to a Special Revitalisation Plan for its client, Birchview Imobiliária.
According to a document published on the Citius portal, the judicial administrator Jorge Calvete reports that "the negotiation phase is closed without the presentation of a Special Revitalisation Plan."
This is due to Caixa Geral’s rejection of the plan after a meeting on January 31st between Birchview, Caixa Geral and the administrator.
Caixa Geral therefore has consigned Birchview to insolvency, owing the State-owned bank €277.8 million from a total debt of €279 million.
Last December, Caixa Geral was more receptive to doing a deal with Birchview with the developer pointing out that “Caixa Geral de Depósitos has carried out a constant and thorough risk analysis of the applicant and has decided to approve its financing continuously proves the normality of the situation."
The company said it was pressing ahead with sales at The Keys and has promissory contracts totalling €7.5 million.
These contracts would have resulted in sales of €40 million and would have helped sell the remaining lots which, when completed, would be sold for €390 million, according to company projections, but the bank was not satisfied and has pulled the plug.
Now that Caixa Geral has made up its mind, the judicial administrator will listen to the remaining creditors, including the State which is owned €376,000 in back taxes.
Birchview is a "real estate, tourism and hotel investment promotion agency, the purchase and sale of real estate, and the resale of those acquired for that purpose, the management of real and personal property belonging to the company or to third parties, the management of real estate assets and civil construction." The developer’s main project is the "development of a tourism real estate project in Quinta do Lago, known as The Keys.
The original loan to Birchview was at a time when Armando Vara, the bent Caixa Geral loans boss, was operating at the bank. He now is under investigation for receiving kickbacks from companies for which he agreed multi-million euro loans.
The original loan to Birchview was in May 2007, when Vara was active. He now is one of the defendants in the corruption investigation, Operation Marques, but there has been no confirmation that Birchview was involved in paying Vara to get its development loan despite a news report in Correio da Manha that €5.6 million is unaccounted for.
Caixa Geral does have charges over lots at the Keys which belong to former offshore companies caught up in the shameful Banco Português de Negócios (BPN investigation: Chapelmoor and Bridgedown, as well as Birchview.
The State-owned bank was informed today that it must, after all, submit a list of those to whom it has lent money since 2000. Caixa had resisted this embarrassing disclosure, claiming that to submit a list would compromise banking secrecy laws.
The Keys, a 72 villa development in Quinta do Lago, is separate to the luxury resort run by Quinta do Lago SA even though The Keys' website states that 'The Keys is at the heart of Quinta do Lago in the Algarve,' which it is.