TAP: Total privatisation of TAP stalls as Chega and PS block 100% sale
The total privatisation of Portuguese State-owned airline TAP now looks unlikely to go ahead anytime soon because the two main opposition parties in Portugal’s parliament are against the State losing complete control over the carrier.
A 100% privatisation of TAP was to have gone ahead in 2026, but now it looks like the State will only relinquish part of the capital control in the airline.
According to Diário de Notícias on Tuesday, only 49% of TAP will be sold for now because of opposition from the PS and Chega that do not want to see 100% of the airline pass into private hands.
Chega says it would prefer the sale of a minority position in the airline to make the company more competitive.
The former leader of the PS, Pedro Nuno Santos, had already stated that the PS would only agree to a partial sell-off of the carrier providing the State continues to have an active role in its management. The new leader of the PS, José Luís Carneiro, has yet to weigh in on the matter.
The airline groups Lufthansa, Air France/KLM and IAG are all interested in buying all of part of TAP.
Meanwhile, the Brazilian airline Azul says that it is expecting TAP SGPS (Now called SIAVILO SGPS) to default on its contract to pay a €177 million debt plus interest.
This is because the administrative bodies at TAP SGPS resigned em masse from their functions between the end of March and the start of June, including the fiscal board and the official accountant.
The company was emptied of assets and now has no management body with no replacement administration appointed.
It essence, it means that SIAVILO, which is 100% State-owned, could cease to exist and therefore not pay the millions owed to the Brazilian airline.
Azul is controlled by Brazilian-American airline mogul David Neeleman although he did offload some preferred shares which do not have voting rights.
He had to sell the preferred shares due to liquidity issues with his other investments, including TAP Air Portugal and Breeze Airways. Azul is said to be in financial difficulties.
Gonçalo Pires (TAP’s financial director), Patrício Castro, Ana Lehmann and João Pedro Duarte were the first directors to resign from their positions on March 31, according to the corporate acts.
On the same date, Maria de Fátima Geada and Baker Tilly, members of the fiscal council, stepped down. This was followed by Mário Chaves, Mário Cruz and Sofia Lufinha (TAP’s executive directors) on April 30 and, finally, on June 6, the resignation of the statutory auditor, PwC – PricewaterhouseCoopers & Associados.
The resignation of the administration follows the depletion of assets of the former TAP SGPS.
Following the €3.2Bn of state aid injected during and after the pandemic, the holding company ceased to have any stake in TAP SA, owner of the airline, in December 2021.
In January of this year, the sale to TAP SA of 100% of Portugália for €4.4 million, of the 51% stake held in Cateringpor, and of 100% of UCS was announced. Also terminated was the stake in the former Groundforce, now Menzies Aviation, as part of the insolvency proceedings. The remaining subsidiary, M&E Brasil, was placed in liquidation after several years of chronic losses.
A source at Azul told ECO that it is preparing for a contract non-compliance since TAP SGPS, after transferring its assets to TAP S.A, effectively became an empty shell company.
It means that SIAVILO does not now have any assets to pay off the debt to Azul which in turn is accusing the Portuguese State of “agreeing to illicit attempts to discriminate against private creditors and to evade obligations (to pay the debt) that its had freely assumed.”
