As part of this transaction, the banks are expected to grant a €500 million loan to the company led by Elizabeth Roth and Rodrigo Guimarães (the founder's son), which, in turn, will have to advance €160 million in equity, the same sources said – amounts that exclude capex requirements. In this type of transaction, it is customary for banks to finance the buyer through what is called vendor finance.

At issue is the Discovery tourism promotion fund, managed by Explorer itself and which owns, among other assets, the Octant hotel chain (launched in 2022 and with eight properties), the Six Senses Douro Valley, the Eden Resort, the Dolce CampoReal, and the Ramada Lisbon Hotel.

At the end of last year, this fund had a net asset value (NAV) of approximately 800 million euros, according to the figure communicated by the manager to participating institutions.

Although the terms of the agreement are more or less stable, the process is not complete, and negotiations between the parties are still ongoing, sources consulted by ECO emphasized.

Novobanco, BCP, and Caixa Geral de Depósitos (CGD) are the banks with the largest exposure to this fund – none of them, nor Explorer, would respond to ECO's questions about the transaction. Oitante (a vehicle created to hold Banif's assets that were not acquired by Santander) and Banco Montepio also hold stakes, albeit smaller ones.

The Discovery fund was created in 2012 with a 15-year maturity (ending in 2027 but extendable until 2032). In recent years, tourism assets have appreciated significantly, driven by the growth of tourism in Portugal and the recent drop in interest rates.

The banks have attempted to sell the fund in the past. In 2021, just as the country (and the world) was emerging from the pandemic crisis, they hired investment firm Houlihan Lockey, but the process failed, as ECO reported at the time.

Like the ECS funds (already sold by the banks in 2022 to the Davidson Kempner fund) or Oxy, this fund was also created to manage real estate and other assets that had been held by the banks over the past decade.

By transferring the assets to the specialised fund in exchange for shares, the banks shared the risk among themselves. However, these exposures weigh heavily on risk-weighted assets and consume capital for the banks, which is why they have long sought to sell.