The American investment specialist Armory Merchant Holdings may soon be back in the game for Herdade da Comporta, long considered the 'jewel in the crown' of the extended Espírito Santo family where successive generations have soaked up the sun in what has been their private playground.
Owned in part by Rioforte, a Grupo Espírito Santo’s property subsidiary, the estate was shovelled into the bulging file being handled by an administrator appointed by the Luxembourg court after the company collapsed along with the rest of group.
The first mistake from Luxembourg, was to appoint Haitong Bank in Lisbon to advise on the sale of Comporta’s twin controlling companies ‘to the highest bidder,’ with any funds raised going to Rioforte’s creditors.
Haitong Bank bought BES International when the Espírito Santo Group collapsed but left José Maria Ricciardi in charge - Ricciardi being Ricardo Salgado’s cousin and justifiably has been accused by the Americans of working more for 'the clan' than for his Chinese masters.
Ricciardi was relieved of his position at the bank in December last year but not before he managed to thwart a sensible and well-funded approach from US investor Asher Edelman through Armory Merchant Holdings. Edelman is a veteran deal-maker with a special interest in Comporta due to his friendship with a senior member of the Espírito Santo’s family, going back decades.
Edelman did not try to hide this friendship and an earlier Armory Merchant approach was rejected by Haitong Bank as being made by an unsuitable candidate to enter into negotiations for the estate.
Blocked, with Haitong advising the Luxembourg administrator not to deal with the US fund, Edelman retreated to Manhattan and has bided his time, waiting for an opportunity to re-enter the deal.
Along came a suitable candidate for the estate in the form of Pedro Almeida, a wealthy businessman who openly boasted of knowing many of the Espírito Santo family and that his buying Comporta had their blessing, despite a link to Comporta’s shareholders being cited as the reason to block Edelman and the American fund.
It was agreed that Almeida was to pay a ‘nominal sum’ to take control of the Comporta portfolio of existing summer homes, the farm, pine forests and a development plan that includes hotels, tourist apartments and extensive leisure facilities.
Yesterday’s news that Almeida, the one chosen by the clan to buy the estate and protect their interests, had been blocked by the State will be a shock to him and an opportunity for the US fund whose principals have bided their time.
In 2016, the State froze as many Grupo Espírito Santo assets as it could find in a worldwide operation that secured over a billion euros of property and artwork.
A condition of the sale of Comporta to Almeida was that the State unfroze the Comporta estate, but this it has failed to do within the 90-day time period specified in the promissory contract and the deal has fallen though.
Asher Edeman commented today. “Clearly, the prosecutor alighted on the truth - Pedro Almeida cooked up his deal with the group responsible for the demise of the Espírito Santo Group and for the tragedy for the depositors and investors in Ricardo Salgado’s fraudulent empire. Now, the best next step will be to remove the negotiation approval from Haitong Bank which is still populated by staff loyal to the Espírito Santo family.”
Edelman confirmed the reason he and his business partner David Storper were banned from entering into negotiations, “the bank did not allow David Storper and I to bid because we refused to divorce ourselves from our close relationship with Vera Espírito Santo Iachia, the woman who created the style of Comporta and asked us to save the estate to maintain its integrity. Our dear friend Vera recently passed away and we intend to revisit the possibility of purchasing Comporta and preserving its extraordinary beauty and character.”
Edelman is no stranger to complex property deals, including those where undue influence has been at work to make the playing field anything but even, “We are delighted the Pedro Almeida crowd was not able to purchase and over-commercialise what is the most beautiful beach community in Europe,” said Edelman in a call from New York.
Armory Merchant now has formally requested that the doors be opened to negotiations as the one reason for blocking the company’s approach has expired.
In a note to Portugal's Public Prosecutor, Edelman writes, “As the Public Prosecutor has declined the sale to your purchaser and as we are no longer in contact with our dear friend Vera Iachia, who introduced us to the Comporta project and has sadly passed away, we are now able to agree to non-contact with shareholders if that remains a condition of purchase. Therefore, we request a due diligence pack on both of the Comporta companies."
Almeida can not now say that he has no friends within the Espírito Santo clan. If this ‘relationship’ issue indeed was the reason for the State to scupper the deal, which seems the likeliest reason, Armory Merchant is in with a good chance of achieving a significant investment in Portugal that will hit at the heart of a clan network that operated so smoothly for so many decades, until Ricardo Salgado fouled everything up.
