New “block” on troubled TAP privatisation deal

As if things were not already bad enough, Portugal’s trouble-torn TAP airline now faces a new hurdle in its race to “sell, sell, sell” before it quite literally goes bust.

The privatisation deal “celebrated” at the end of the government’s legislature was until very recently blocked by banks who were not convinced that the Atlantic Gateway Consortium could guarantee outstanding loans of €646.7 million – particularly as the group is seeking a €1.2 million loan themselves.

This block appeared to have been lifted on Saturday, when Expresso revealed that the banks had agreed to new shareholders and a restructuring of the debt over seven additional years.

But as soon as that hurdle was cleared, the Colombian airline mogul twice snubbed in his bids for TAP’s ownership tossed a new spanner into the works.

Germán Efromovich went to gargantuan lengths to satisfy Portugal’s demands for privatisation – even changing his nationality to Polish – but even so the ‘deal’ went to Brazilian airline boss David Neeleman and his Portuguese partner, transport billionaire Humberto Pedroso.

Efromovich was incensed and is now playing every legal card he can muster.

A spokesman confirmed to Diário Económico today: “We are going to make sure the definitive contract does not go ahead.”

Concerns centre on debt guarantees, and – more pointedly – allegations that Portugal has disrespected EC rules by handing over control to a non-European.

The long-awaited decision by civil aviation authority ANAC on this issue has played into Efromovich’s hands – as ANAC confirmed that it was not clear when the deal was signed who is in control of Atlantic Gateway, writes Expresso.

Thus, Efromovich’s legal bid for an embargo on the process will now go through the courts, and no doubt further embarrass the coalition government as it tries desperately to cling to power.

The TAP privatisation was one of a number that the government pushed through in the final weeks of its tenure. It is already “threatened” by the spectre of a left-wing alliance coming to power where all parties involved are against the loss of State control in the airline. But as outgoing transport minister Sérgio Monteiro explained in September, TAP cannot hang on indefinitely. It is haemorrhaging money, with losses so far this year coming to €109.6 million.

If the sale doesn’t go through, Expresso writes that the previous government warned there would be widespread sackings, and TAP as we know it would become a “TAPezinha” – a much more smaller operation.

Económico concludes its write-up today saying this is not the first time Efromovich has complained to Brussels over the protracted privatisation, and it is also not the first time there has been a bid for a legal embargo to block the deal. The first embargo was overridden by the government citing public interest.

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