Were last week’s headlines just slick PR?
After a great deal of media kerfuffle last week, Portugal’s minister for infrastructure and housing Pedro Nuno Santos has been forced to admit there is no certainty that Portugal’s ‘flagship airline’ TAP will be sold next year. The government is not even in ‘negotiations’ with potential buyers – even though these have been intimated as Air France/ KLM, Lufthansa and the IAG group.
“So at this moment there is no type of negotiation with any potential buyer?” IL’s Carlos Guimarães Pinto quizzed yesterday. “No there is not”, said Mr Nuno Santos.
And is the reprivatisation ‘defined’: meaning, does the government even know how much of the airline it is willing to sell?
“We stated an objective that was the opening of TAP’s capital, because it was never the objective for the government to keep 100% of TAP. That process has not started and we cannot give an answer about a process that has not started,” said the minister who cannot be comfortable about where this is all going.
Years ago, the country was led to believe much of the money ploughed into TAP was ‘a loan’. Now that too has come up against the reality that it was a “recapitalisation process, and as such does not need to be repaid” (this coming last week from the airline’s chief finance officer Gonçalo Pires). He told Dinheiro Vivo last week “The first liquidity injection that was made into TAP was in the form of a loan of €1.2 billion, convertible into capital when the restructuring plan was approved. When that happened, the loan converted into capital because all liquidity injections in the plan are capital. In other words, it was first put into loan and converted into capital at the end of last year, when the plan was approved”.
The 5% capital that was meant to belong to TAP workers also appears to have been ‘diluted’ in this conversion. Explains Lusa, the minister said negotiations with Brussels on the TAP restructuring plan resulted in the requirement for cash injections being transformed into capital “so that, in this framework, all shareholdings are diluted”.
Pedro Nuno Santos faced questions from various opposition politicians yesterday, all of them coming to realise that last week’s positive soundbites about 3rd quarter profits and potential interest from various heavy-hitters might simply have been very slick public relations.
Paula Santos, of the PCP communists, asked why, if TAP had recorded over €111.3 million in profits recently, staff still had to face salary cuts.
“We cannot end the cuts” while the company is still running a deficit, said the minister. Which pretty much says it all.
NB Since last week’s positive stories on profit and potential buyers, cabin crew syndicates have announced a strike for two days in December.