The Minister of Infrastructure and Housing, Miguel Pinto Luz, confirmed on Thursday that the government took care to ensure that the “concerns” of President Marcelo Rebelo de Sousa regarding the TAP privatization process would be “addressed,” believing there would be no “problems from that point of view.”
“The government’s concern was to ensure that these concerns were addressed. […] We believe we have no problems from that point of view. Common sense is needed today by all parties because TAP has been in zigzags. It has been public, it has been privatized, even before April 25, then it was nationalized… Enough. Both for the workers, for the Portuguese, for the country, and for potential investors. It is necessary to call the parties that support TAP’s privatization and create a sustainable platform”, said Miguel Pinto Luz in an interview with RTP.
This is because President Marcelo Rebelo de Sousa vetoed the document prepared by the government of António Costa to initiate the TAP privatization in October 2023, considering that “it raised multiple doubts and reservations in light of the desired maximum transparency of the process”.
On Thursday, the government of Luís Montenegro approved the decree-law to launch the sale of up to 49.9% of the airline’s capital, believing it is possible to maximize “the 51.1% opportunity”.
“In other words, we sell 49.9%, find a credible international partner who will make the company grow with more routes, more planes, which will increase the value of the 51.1% stake. From this point of view, we maximize the future control premium, we maximize synergies, and, above all, we give the opportunity to these investors, who appear in this first phase, to come from outside the European Union,” explained Miguel Pinto Luz.
Luís Montenegro announced on Thursday the ‘green light’ for the reprivatization of TAP, considering this the “kick-off.” Later, the minister responsible for this dossier, Miguel Pinto Luz, provided details in a Council of Ministers briefing.
The official also emphasized in the same interview that the government will give “management guarantees to whoever buys” to “maximize the opportunity, ensuring Portuguese citizens get a return on their investment”.
“The government was supported by the electoral programs of both PS and Chega, which were endorsed by the Portuguese, and stated they were in favor of TAP’s privatization but were not available for a sale of more than 50%. What the government presented today is exactly what the PS and Chega [wanted],” he added.
We won’t sell TAP at any price. If it’s a bad deal, if the private sector doesn’t offer guarantees, the government won’t sell TAP
The minister also reiterated AD’s intentions to achieve “a 100% private TAP,” summarizing the process towards this goal: “For now, we will have a 49.9% TAP. When? In a year’s time, with clear deadlines – 60 days for pre-qualification, 90 days for non-binding proposals, 90 for binding ones, and a negotiation phase, always preceded by Council of Ministers meetings, full scrutiny, total transparency.”
In this regard, the governor highlighted that the executive “will try to safeguard in the minutest detail all strategic, human, and economic dimensions of this company, because it is a company that we are all proud of, serves the national economy significantly, and we want it to continue serving.”
“We won’t sell TAP at any price. If it’s a bad deal, if the private sector doesn’t offer guarantees, the government won’t sell TAP”, he assured on RTP.
PCP, Livre, BE, and PAN today classified the start of the TAP reprivatization process as “a wrong option,” questioning the government’s “haste,” while JPP admitted this path but said more details were needed.
When asked about possibly recovering the 3.2 billion euros in public aid injected into the airline under the restructuring plan due to the pandemic, Miguel Pinto Luz refused to be conclusive but criticized the PS Secretary-General, José Luís Carneiro, for making such a demand.
“We want to maximize recovery. I can’t guarantee what investors will present. We believe we have the best possible tender specifications, we have prepared the company to sell in the best way possible. That’s why we want to retain a stake to ensure that, in the medium/long term, we can have dividends, another appreciation of our shares. We must have a lot of respect for 3.2 billion euros; they are not small change. It’s a lot of money that the Portuguese were called to put into TAP, unfortunately for reasons foreign to AD.”
And he added: “The PS Secretary-General had the audacity to ask that 49.9% of TAP’s capital should be worth 3.2 billion euros. It was assessing the company at 6.4 billion euros.”
The minister also criticized the position of IL, which expressed “profound disappointment” with the fact that the government is only considering privatizing 49.9% of TAP’s capital. Deputy Mário Amorim Lopes even emphasized that “António Costa himself was more ambitious and considered the possibility of total privatization of the airline.”
The Finance Minister today argued that recovering the 3.2 billion euros injected by the state into TAP will be a difficult task, highlighting that any assessment should be based on the market reality and not outdated estimates.
“I find the statements strange. IL, knowing the market, realizes that it would be, at least, mismanagement to divest now more than 50% and not maximize the opportunity. TAP will be worth more after the investor enters and invests in more planes, more routes, more sustainability,” said Miguel Pinto Luz.
It should be noted that the approval of the decree-law marks the start of the TAP reprivatization process, which has been on the table since 2023.
The airline was partially privatized in 2015, a situation that was reversed by the government of António Costa, which regained 50% of the company in 2016.
Last year, the government of Luís Montenegro expressed its intention to proceed with the sale of a minority stake, initiating negotiations with major European groups such as Air France-KLM, Lufthansa, and IAG.
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