A privatization process for TAP is set to begin “in the coming weeks,” with the government aiming to sell 50% of the Portuguese airline’s capital, Finance Minister Joaquim Miranda Sarmento announced on Monday.
“In this initial phase, we will sell less than 50% of the capital. We will proceed with the sales process in the coming weeks. We are trying to find an international partner that can help us develop the company, increase routes, the number of aircraft, and investment in the company,” the Finance Minister stated in an interview with Bloomberg TV.
Miranda Sarmento also mentioned that the goal includes “recovering some of the money taxpayers invested in the company four years ago.”
During an interview with Bloomberg in Brussels on the sidelines of the Eurogroup meeting, the official refused to disclose the company’s valuation conducted by consulting firms, which he claimed is already in hand. However, it will only be published when the government releases the tender specifications.
“When we announce the process, the schedule, the conditions for inclusion or exclusion, we will also make that evaluation public,” reported Miranda Sarmento.
Finance Minister Joaquim Miranda Sarmento also noted that the government has been contacted by “several potential candidates, large airlines, who are very interested” in purchasing TAP.
In March, Air France-KLM affirmed that, even if TAP’s privatization were delayed due to Portugal’s political crisis, it remains interested but seeks clarity and stability as quickly as possible.
“The fact that there might be a delay of six or 12 months does not seem material to me, but we would like to have visibility [process definition] as soon as possible,” remarked Ben Smith, the group’s CEO, at a press conference during the presentation of the 2024 results.
Air France-KLM has the French state as its largest shareholder, with 27.9%, followed by the Netherlands with 9.13%. The structure also includes the French CMA CGM with 8.8%, China Eastern Airlines with 4.58%, and the American Delta with 2.8%.
Earlier this year, Joe Gill, director at GoodBody Capital Markets and aviation specialist, considered that the groups IAG and Lufthansa are the most obvious candidates for TAP’s privatization, due to their history of acquiring smaller companies and financial solidity.
“I think the two most obvious large groups [in the privatization of TAP] are IAG and the Lufthansa group. It would all come down to these two groups, which have a successful history of acquiring small companies and possess financial solidity, which I am unsure if Air France-KLM has. […] they have a lot of debt,” Joe Gill pointed out in a meeting with Portuguese journalists in Dublin, Ireland.
The government had previously ensured that TAP’s reprivatization would start in 2025, aiming to sell 100% of the capital, recover some of the state’s investment in the airline’s recovery, and maintain Lisbon’s hub.
TAP was privatized by the PSD/CDS-PP government led by Pedro Passos Coelho, with the process completed on November 12, 2015, two days after a motion of rejection of the executive’s program was approved.
The Atlântico Gateway consortium, consisting of shareholders David Neeleman and Portuguese businessman Humberto Pedrosa, won the sale process, but the operation was partially reversed by the PS government led by António Costa, supported in parliament by the PCP, Bloco de Esquerda, and Os Verdes.
In 2020, TAP returned to state ownership due to the assistance provided in response to problems caused by the Covid-19 pandemic.
