The privatization of TAP is set to commence “in the coming weeks,” with the government aiming to sell 50% of the capital of the Portuguese airline, Finance Minister Joaquim Miranda Sarmento announced on Monday.
“Initially, we will sell less than 50% of the capital. We will proceed with the sale process in the coming weeks. We are trying to find an international partner who 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 further outlined that the goal is also to “recover part of the money that taxpayers invested in the company four years ago.”
In an interview in Brussels during the Eurogroup meeting, the official declined to disclose the company’s evaluation conducted by consulting firms, which he claims to have already received. However, it will only be released when the government publishes the terms of reference.
“When we announce the process, the schedule, the conditions of inclusion or exclusion, we will also make the evaluation public,” Miranda Sarmento pointed out.
Potential interested parties? Three are in the spotlight
The Finance Minister also noted that the “government has received contacts from several potential candidates, major airlines, who are highly interested” in purchasing TAP.
In March, it should be remembered, Air France-KLM confirmed that despite any political crisis in Portugal that might delay TAP’s privatization, their interest remains, but they requested clarity and stability as soon as possible.
“The potential for a delay of six or 12 months doesn’t seem material to me, but we would like to have visibility [process definition] as quickly as possible,” said Ben Smith, the group’s CEO, at a press conference during the presentation of the 2024 results.
The French state is the largest shareholder in Air France-KLM 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%.
At the beginning of the year, Joe Gill, director of GoodBody Capital Markets and aviation specialist, considered that the IAG and Lufthansa groups are the most obvious candidates for TAP’s privatization, due to their history of acquiring small companies and financial solidity.
“I think the two most obvious large groups [in the privatization of TAP] are IAG and the Lufthansa group. Everything would come down to these two, they have a successful history in acquiring small companies and they have financial stability, which I don’t know if Air France-KLM has, […] they have a significant amount of debt,” commented Joe Gill in a meeting with Portuguese journalists in Dublin, Ireland.
How did it come to this?
The government had already assured that the reprivatization of TAP would start in 2025, with the intention to sell 100% of the capital, attempt to recover part of the money that the state injected into the company’s recovery, and maintain Lisbon as a 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 parliamentary motion rejecting the executive program was approved.
The consortium Atlântico Gateway – composed of shareholders David Neeleman and Portuguese businessman Humberto Pedrosa – won that 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 the Greens.
In 2020, TAP returned to state ownership, following the aid provided due to problems caused by the Covid-19 pandemic.
