Yesterday TAP’s private shareholders – Atlantic Gateway consortium – were described as “close to coming to a deal with the government”.
Today Expresso has just flashed up the news that the airline is to be nationalised as the State and Atlantic Gateway have not agreed on the extent of the government loan needed.
For the time being, there are no ‘furter details’.
Information yesterday was that the State would be pumping up to €1.2 billion into the troubled airline to save it from bankruptcy.
Latest figures suggest TAP’s already crippling losses of recent years were exacerbated by a further €395 million loss in just the first two months of this year.
Since then, of course, things have only gone from bad to worse.
Atlantic Gateway’s David Neeleman was telling newspapers yesterday that “all the investment” due to be made by the State in the airline would have “a guaranteed return, multiplied many times”.
The first development the deal was expected to seal was the paying of staff salaries – now possibly hanging further in the balance than they were yesterday.
This has been a particularly fraught situation for months. Reports in the recent past suggested Neeleman and his Portuguese partner, transport mogul Humberto Pedroso, were holding out to recoup some of the millions they had invested in the loss-making company.
This is not the case, Neeleman seemed to be saying yesterday. In a statement released to the press, he suggested that the company was prepared to accept all the government’s terms – even though they aren’t the terms he had hoped for – including State participation in TAP’s Executive Commission, which could begin “immediately” – even before any money comes through.
“Even though it isn’t our proposal, we are extremely thankful to the Portuguese State for this emergency loan”, he stressed, insisting that Atlantic Gateway’s focus today – just as it was five years ago when it ‘won the privatisation and saved TAP from insolvency’ then, is to ‘transform the airline into a renewed company, of larger dimension and prepared for the future”, he wrote.
Neeleman intimated that this kind of State support is being offered to companies throughout Europe due to the effects of the pandemic – and that effectively, the government has nothing to lose.
What suddenly turned the whole deal on its head is not yet clear, but likely to emerge over the course of today.
Tuesday saw Expresso newspaper flash up the shock announcement that Portugal’s flagship airline TAP was to be nationalised. The paper may have jumped the gun: on Wednesday as we went to press it was looking more like the Portuguese government was likely to buy joint-shareholder David Neeleman out – therefore avoiding the need to nationalise.
As pundits have all been saying: to nationalise in the middle of a pandemic would be “the height of risk”.
But the government is between a rock and a hard place. TAP is ‘bust’: it doesn’t even have enough money to pay staff salaries for July – but to let it fall would carry massive social and economic costs, as well as signify a huge disservice to the nation the airline represents.
At least that’s the official line as negotiations are still ongoing.
The issue appears to be that Neeleman refuses to ‘leave’ without a 55 million euro pay-out (for his shares).
Says Expresso, the government is only prepared to pay 40 million.
Bizarrely, on Monday the situation appeared to be so different. Neeleman released a statement saying he was “extremely grateful” for the government’s offer of an emergency loan of 1.2 billion euros, in which he suggested “all the investment made by the State has a guaranteed return, multiplied many times”.
How the airline mogul came to this conclusion considering TAP has been losing money hand over fist for years is not instantly clear.
But something happened on Monday night shortly after he made his statement that made government negotiators ‘see red’.
On Tuesday the word ‘nationalisation’ was everywhere.
On Wednesday, as we went to press, it was not quite so visible.
Explains Expresso, Neeleman owns 50% of Atlantic Gateway, which in turn controls 45% of TAP. The other 50% is in the hands of Portuguese transports boss Humberto Pedrosa who appears committed to remaining.
The State owns 50% of the airline, and staff the remaining 5%.
The idea is for the State to increase its share of ownership to roughly 70%. But it is all hinging on ‘the money’.
In Badajoz as we went to press for the reopening of land borders with Spain, prime minister António Costa said “today’s the day” for a solution. Instantly countering this sense of certainty, he added: “If not today, in the next few days. But today I am hoping for a negotiated solution with an agreement, and not an act of imposition by the State” (meaning nationalistation… without actually saying it).
The PM stressed that in his mindset it is “fundamental” that the country retains TAP, “for our territorial continuity, for our connection to the world and our economic development”.