Portugal, Investors To Share Control Of TAP
The new Portuguese government and a private consortium that bought a 61 percent stake in flag carrier TAP last year have agreed in principle to give the state a larger stake and share control of the airline, leaving it under private management.
After long and uneasy negotiations that began when the Socialist government took over in November, promising to regain control of the indebted airline, the sides signed a memorandum of understanding on Saturday under which the state will pay EUR€1.9 million to lift its stake to 50 percent from 34 percent.
"This is a 50-50 deal, under which the company will be privately managed," said Humberto Pedrosa, the Portuguese partner in the consortium led by American-Brazilian aviation tycoon David Neeleman.
Prime Minister Antonio Costa said that the state had to ensure that it retains a strategic vision for the carrier while respecting the rights of private investors, adding that "talks have not been easy… but they resulted in a good partnership".
Neeleman said that under the agreement the government would not interfere with the company's executive management, but added that "there is still a lot to be negotiated", such as interest rates on bank loans extended to the company.
The consortium and the state will have the same number of board members, even though the consortium's stake will for now formally be just 45 percent. Five percent of the company is reserved for employees, but the consortium can buy those shares from them.
The previous government sold the TAP stake in its last days after being ousted by the Socialists and their far-left allies in parliament.
Because of European Union state-aid rules, the Portuguese state could not inject capital into the heavily-indebted and loss-making TAP, leaving it on the brink of bankruptcy.
Since it changed hands in November, TAP has already ordered 53 new Airbus jets and 17 regional aircraft worth a total USD$9 billion.