Portuguese government studies model for sale of TAP – Air Portugal

13 February 2014

The banks advising the Portuguese government in the privatisation process of airline TAP – Air Portugal plan to analyse the possibility of a capital increase for the company by floating it on the stock exchange, Portuguese daily newspaper Público reported.

This model was previously considered – and ruled out – last year, but the Finance and Economy ministries plan to consider all possibilities, such as turning to the financial markets, before making a final decision on the sale.

The newspaper did not give a date for the four banks – Citibank, Barclays Capital, Banco Espírito Santo de Investimento and Crédit Suisse – to hand in the report on the capital increase, an operation in which the Portuguese state would keep a significant stake in the airline.

The Portuguese government has given signs of re-launching the privatisation process this year, in order to comply with the memorandum of understanding signed with the three-way team that is supervising the country’s bailout process, although it has yet to come to a consensus on which sales model to use.

TAP’s results for 2013 have yet to be made public, but by September of last year the airline posted a profit of 8.5 million euros, compared to a loss of 9.7 million euros in the same period of 2012 and its debt levels fell by 6.8 percent to 802.9 million euros.

However, these figures do not include other group subsidiaries, such as loss-maker TAP Manutenção e Engenharia Brasil, which, despite improving its results, has had a negative effect on group accounts. (macauhub)