Pestana Group says it won’t sell Pousadas but might buy government’s share if the price is right

The Pestana Group says it will sell its 49% stake in Enatur – the Portuguese company that is responsible for managing the assets and operations of the historic Pousadas de Portugal hotel network – before December 31, 2026 to Portugal’s tourism agency Turismo de Portugal if the “price is right”.

In an interview with the business daily Negócios, the CEO of the Pestana Group, José Theotónio recalled that in light of a 2003 agreement, the State, which privatised 49% of Enatur that year at a time when the public company was facing losses, said that the State could exercise its option to purchase the 49% at the end of the current concession contract to run the chain of historic boutique hotels but for a “much higher amount”.

Nevertheless, Portugal’s largest hotel group had admitted that it may make a purchase and sale deal before the contract runs out.

It would mean that Turismo de Portugal would buy 49% of Grupo Pestana Pousadas – currently 100% held by the Pestana Group in Enatur.

José Theotónio said that Turismo de Portugal had sent them a letter on November 13, communicating that it wanted to buy its position and would shortly be in contact with them.

However, this would have to be outside of existing agreements which don’t currently permit this.

Under the 2003 agreement it is established that the right to have the option of purchase and sale may be exercised by the parties after the end of the concession and the start of a new one with the State having the option to buy after December 31, 2026.

Moreover, the purchase is am option and not a right and if exercised each party would chose an appraiser from a number of pre-defined auditors with the average price being chosen.

The letter states that Turismo de Portugal would like to effect the purchase during 2026 and therefore before the end of the contract.

“We are not interested in selling before the concession is up. In any case, and given that this intention exists, what we are proposing to Turismo de Portugal is that they make us an offer. If the offer is good, we’ll sell the 49%.

“If the offer is not acceptable from our point of view, Turismo de Portugal should allow us to buy their 51% for the proposed value plus 10%”, the Pestana boss explained and added: “If the State gives us a good price, we’ll sell”.

Without saying what a good price was, the CEO of the Pestana Group said that they had paid €18 million in 2003 for the 49% stake in Enatur which at the tine only had a liquidity of €5 million and a bank debt of €22 million while in 2002 it had made losses of €1 million.

But now the story is different. Enatur’s debt is down to €2.7 million while its equity value is €54 million for a share capital of €8 million.

In other words the privatisation and concession process was successful and now that 49% share is worth a lot more to the Pestana Group which, naturally, will demand a higher price.