TAP-Air Portugal negotiates a loan with a syndicate led by the ICBC

20 April 2020

TAP-Air Portugal is negotiating a loan up to 375 million euros with the Industrial and Commercial Bank of China (ICBC) and two other international financial institutions, reported Portuguese financial newspaper Jornal Económico.

The paper, which recalled that TAP’s operations have practically been at a standstill due to the Covid-19 pandemic, reported interest had already been expressed by investment funds to take part in the operation that is expected to be backed by the Portuguese State.

TAP has already requested assistance from the State due to the impact that the new coronavirus is having on its business, with the chairman of the board of directors of the company, saying he expected, “an answer very soon.”

Miguel Frasquilho noted during a meeting held in Parliament that this assistance, “will have associated constraints,” but added that, “it is under these conditions that we believe that the aid will be provided.”

The newspaper reported that these conditions include changes to the TAP governance model, with the State taking on another role, namely marking its presence on the executive commission.

David Neeleman, who owns – together with entrepreneur Humberto Pedrosa – the Atlantic Gateway consortium, which holds 45% of the capital of the Portuguese airline, told the Observador newspaper he was “fully available” to cooperate with the Government on a solution for TAP.

The Prime Minister, António Costa, and the Minister of Economy, Pedro Siza Vieira, have admitted the possibility of nationalising the airline, but Neeleman also told the newspaper that the company has competitive proposals to finance itself and what is needed is “a state guarantee.”

“Among the various mechanisms available for State support, the issuance of a guaranteed debt is what is being adopted most often by our competitors as it has a number of advantages, including implementation time which is crucial to TAP at the moment,” the businessman said.

The TAP group recorded losses of 105.6 million euros in 2019, an improvement of 12.4 million euros compared to losses of 118 million posted in 2018.

In addition to the 45% owned by Atlantic Gateway, TAP is 50% owned by the State, through Parpública, and 5% by its workers. (macauhub)