Project Tethys: 72 Greek Hotels in Red Loan Portfolio Get a Second Chance

SMERC President Nikos Karamouzis speaking to Greek journalists on Tuesday.

The SMERemediumCap (SMERC) investment fund on Wednesday revealed plans for the portfolio known as “Project Tethys”, which includes a collection of hotel real estate loans with non-performing liabilities.

SMERC is part of the consortium that recently acquired the “Project Tethys” red loan portfolio from Intrum Hellas that includes 72 hotel units with a legal claim of 254 million euros. The consortium also includes Latonia Enterprises and Brown Hotels.

“No hotel of the 72 will close,” SMERC President Nikos Karamouzis said during a media event in Athens.

“We believe in realistic solutions that can lead to the upgrade and sustainable future of each hotel,” he added.

Tethys, which is the first sectoral portfolio of loan liabilities sold on the secondary market in Greece, consists of 72 hotel units with more than 4,000 rooms in popular tourism destinations of which 50 percent are located on Aegean islands (22 units), Ionian islands (3) and Crete (11) while the rest in Macedonia and Thrace (19 units), Central Greece (9) and the Peloponnese (8). Intrum Hellas was the manager of the claims arising from loans and credits from the special purpose companies with the names Sunrise I NPL Finance DAC, Sunrise II NPL Finance DAC and Vega II NPL Finance l DAC to which the specific portfolio belonged.

SMERC President Nikos Karamouzis.

According to Karamouzis, the consortium prefers for the owners of the hotels in the “Project Tethys” portfolio to choose the appropriate solution for their businesses themselves.

“We are very open to discussions – this is the primary goal of the consortium – and at the same time we are willing to make large discounts on debts,” he said, adding however that the consortium will not accept “under any circumstances” the debtors not paying.

“We are putting together a strong team of lawyers that will discuss with each hotel owner to find the best solution for the sustainability of their hotel, whether it is a loan cut and arrangement, a sale of a loan, or an auction,” Karamouzis added.

Moreover, the consortium is also interested in investing in the upgrade of some of the large hotels in the portfolio.

“Greece needs 5-star hotels and luxury tourism, and that is what we are investing in,” he said.

SMERC’s president spoke of the “Project Tethys” portfolio during the presentation of the fund’s mega investment in the Patmos Aktis Suites & Spa hotel (not part of the portfolio).

A five-star hotel on the island of Patmos, the Patmos Aktis Suites & Spa was acquired by SMERC last year. The fund is investing 20 million euros in the hotel, aiming to boost the tourism appeal of the island and attract an upscale audience. The investment is the biggest that has ever taken place on the Greek island of Patmos.

SMERC manages funds totaling 142 million euros from 42 institutional, corporate and private investors, and is active in the sectors of tourism, facility management, food and logistics. The fund has also announced plans to invest in a veterinary clinic that will offer pet health services of high standards.