Portugal's Socialists Seek To Suspend TAP Sale

Portugal's Socialist Party has asked state holding company Parpublica to halt the sale of TAP, a day after the ousting of the previous government.

The sale of TAP to a consortium made up of American-Brazilian aviation tycoon David Neeleman and Portuguese bus company owner Humberto Pedrosa was agreed by the former centre-right government in June.

"The Socialist Party does not accept that the state does not maintain a controlling stake, as it should have a direct say and presence in the strategic path of this company," the Socialist Party's parliamentary group said in a letter to the head of Parpublica.

The sale was due to be completed on November 12.

The Socialists, together with the far-left Communists and Left Bloc, toppled the centre-right government in a historic parliamentary vote on Tuesday, and want to form their own government.

As the centre-right is now ruling in a caretaker capacity, "the legal and political conditions are not present" for the TAP sale to go ahead, the letter said.

"The Socialist Party, as is public, is completely against the way the privatisation process has developed since it started," the letter said.

The privatisation deal included the payment of only EUR€10 million (USD$11 million) to the government while the buyer would inject EUR€345 million into TAP. The buyer had also planned to buy 53 new Airbus aircraft for TAP and make EUR€250 million in pre-payments for those in 2016 and 2017.

Because of European Union state-aid rules, Portugal cannot inject capital into the heavily-indebted and loss-making TAP.

The Socialists, pushed by their hard-left allies, want to roll back austerity policies of the past few years.