Decision on EFACEC looms
The minister for the Economy, Pedro Siza Vieira, is confident that the reprivatisation process of Efacec will be completed by the end of the year.
The only company now in the running for the company is DST, at a time when the company is trying to contract a new loan from the banks to secure operational finance.
“The decision to re-privatise (the company) will be taken by the end of the year. The State has no vocation to manage industrial companies”, he said in a press conference.
The sole proposal from the engineering and construction company DST is currently being studied by the State organisation that manages Portugal’s public companies, Parpública, which will have to report back to the Council of Ministers with recommendations.
“The instructions that we have given is see if the offer is a credible one and has the conditions to be selected”, explained Siza Vieira.
However, the length of the process, which should have been completed in the first quarter of 2021, has dragged on for months to complete the other phases of the process. “But the earlier we resolve this the better” said the minister.
“If the deal doesn’t go through, the company will have to continue in State hands since there is no better alternative way to operate it given the challenges it is facing”.
In addition to the reprivatisation process, the company has been facing a growing wave of internal strife with staff organising two strikes to demand the dismissal of the current board led by Angelo Ramalho, but also over the purchase of raw materials so that it can continue in operation.
The minister of the Economy recognises “Efacec needs to provide fresh guarantees to sign new contracts” to ensure cashflow.
The company’s current needs are around €70 million contracted last year through a banking syndicate. “Since the State has been running Efacec, the volume of guarantees has reduced because the contracts were met”, said Siza Vieira, stressing that he has total confidence in the company’s viability.
The company’s accounts to September revealed a negative operational result of €12 million and raised doubts over the company’s viability.
Any positive results will not cover a negative EBITDA of €20 million, while its gross debt stands at €190 million, with turnover falling by around €50 million on the initial estimate (€290 million), while debts to suppliers that have been paid stood at around €80 million. These results are also explained by an “unexpected deterioration” in its order book for July and August.
Efacec produces power products such as transformers and switchgear; designs and builds energy and power systems for industry and transportation, as well as being in the forefront of electric mobility.