TAP sale process could begin this summer

 In News, Original, TAP

The Portuguese Government hopes to start the ball rolling for the sale of national airline TAP before the end of the summer.

The Council of Ministers have given a mandate to Parpública – the State-owned umbrella holding that detains public companies in Portugal – to undertake one of two independent valuations to ascertain the value of the airline.
Portugal’s Finances Minister, Fernando Medina expects that a decree-law will be approved in July that will begin the privatisation process of the airline. Two business valuation assessors will be selected by the Ministry of Finances and by Parpública “to work independently” to provide “the most complete value possible for TAP in its different forms”.
The assessors will give the intrinsic value for the company within the context of the Lisbon hub, its value in the context of energy transition, and synergies that could be generated for the buyer post-acquisition.
At a joint press conference with the Minister of Infrastructure, João Galamba, the Finance minister said there were interested parties in TAP, emphasising that the airline was a “great company”both in terms its aeronautical size, and within the context of energy transition, with a potential to gain in value.
In February Fernando Medina had announced that the Government was doing “ground work” to start the privatisation process.
Medina sad that TAP, which is under an EU approved €3.2Bn bailout plan, had already carried out a preliminary study of the market to assess “the investment prospects of some potential investors”.
“It is exploratory work but the main conclusion is that, given the very good performance TAP is having, far above the prospects of the restructuring plan, this is a good time to evaluate and decide on the privatisation,” he told a news conference in Madrid.
In December 2021, Brussels approved the bailout plan for TAP, but imposed a tough restructuring that included downsizing its fleet, shedding over 2,900 jobs and reducing wages of most workers by up to 25%.
The state now owns 100% of the airline, but Prime Minister Antonio Costa said in January that the government was considering an outright or partial sale of the business. Lufthansa, Air France-KLM and British Airways owner IAG are potential buyers, according to analysts.