TAP privatisation process to begin from September

The privatisation process of Portugal’s State-run airline TAP will only begin in September after evaluations of the company by consultants EY and Banco Finantia are handed to the government in the second quarter of August.

The evaluations have been delayed from Initial delivery dates because the size of the airline requires substantial time to complete the valuation and because EY and Finantia are asking for more data about the airline.
The umbrella company that holds all Portuguese public companies, Parpública, had officially communicated on July 4 that it would commission independent reports from the consultant and the financial institution.
TAP’s value will be set by EY and Banco Finantia although the value will not be necessary for the preparation of a draft law, but will be a crucial factor for any decision taken by the Council of Ministers for the terms of sale to the private interested parties, particularly the percentage of capital that will be sold and the part that will remain in State hands.
According to the newspaper Negócios a decision on the percentage of capital to be sold has not been reached by the government due to a lack of political consensus within the government.
At present there are various possibilities on the table: the decree law could set an interval for the percentage of capital to be sold or not even mention the percentage of the airline to be put up for sale until much later when the privatisation dossier with the company’s value is seen by the Council of Ministers and when it sets out the competition rules for the privatisation afterwards.
So far the discussion has been about the terms and percentage of the company that the State will retain that will enable it to have a say on the company’s future strategy and the retention of Lisbon as a hub for Africa and Latin America.
The government also wants to retain the airline’s headquarters in Lisbon as well as safeguarding the brand.
According to the latest financial report from TAP Air Portugal, the airline closed 2022 with a net profit of €65.6 million, representing an increase of €1,664.7 million on FY2021. Revenues reached €3,485 million at the end of 2022, 151% above FY2021 – including a record Q4.
One month ago the estimated ballpark value of TAP was put at between €900 million and €1.2Bn. In 2015, the last time it was valued, the company was worth €641 million.