Authorisation for Efacec sale could drag on for months

The negotiations with Brussels for a formal authorisation to sell electrical and transport engineering systems company Efacec could drag on for months.

This is because technocrats in Brussels at DGComp (Directorate-General of Competition of the European Union) think that the financing awarded to Efacec as part of the private sale deal has not been carried out under market conditions, and is tantamount to State aid.
The financing deal from Portugal’s development bank, Banco de Fomento, foresees €60 million in capital and a credit line of €100 million over 20 years at an interest rate of 1.5% with a seven year grace period.
According to ECO Online, the government pre-notified Brussels that Efacec would be sold to Portuguese company DST a month ago, but has yet to receive a reply that would enable it to deliver a formal notification.
This is because DGComp that the terms of the sale operation are tantamount to the kind of State aid Portugal loaned to airline TAP and would therefore would require the costs of such an aid package to be accounted for in Portugal’s budget deficit, which was the case with the national airline.
Efacec posted losses of €21.5 million in the first quarter of 2022, while its consolidated losses for 2021 stood at €183.9 million.
On 2 July 2020 the government nationalised around 71% of Efacec and on 24 February the new government announced an agreement for the sale of DST. On 25 March a formal agreement was signed between the State and the engineering company managed by José Teixeira and at the start of May the government sent a pre-notification of the operation to DGComp as a necessary pre-condition for the sale.
Now the negotiations with Brussels could drag on for months with likely changes to the conditions of sales before Brussels finally gives the green light.