Government expects capital injection for TAP in mid-June

  • ECO News
  • 13 May 2020

The government and TAP are working to substantiate a capital injection into the company, which is expected to be closed by mid-June.

The government is working with TAP’s management to substantiate a capital injection into the company, which is 50% state-owned. The expectation is that this task will be completed by mid-June.

In a session in Parliament, the Secretary of State for the Treasury, Álvaro Novo, confirmed that the government has already received “an initial request” which “dealt with several matters”, including “the State guarantee for a loan that TAP intends to get”.

However, according to Álvaro Novo, “this personal State guarantee is duly defined in Portuguese and European law”. “Therefore, they need a justification different from receiving a letter making the request,” he stressed.

“I have already had the opportunity, personally, to inform TAP’s management that it was necessary to strengthen the grounds for that request,” continued the Secretary of State for the Treasury. This is being done within the framework of a working group created for this purpose and which has “people of high technical competence” in the sector, he assured.

Thus, the government expects to conclude the justification of the request in May and to start negotiations with the European Commission so that everything is aligned by “mid-June”.

“We expect that, from these interactions, by the end of May there will be a technical background from TAP’s executive committee on the financial needs and strategic operational changes that need to be made to ensure not only the short term at TAP, but also what the medium and long term will be at TAP in this context of high uncertainty,” he said.

“As this work is expected to be concluded by the end of May, we hope later, speaking with the European Commission, because we are obliged to do so, to have a practical decision to inject money under conditions that will be established during this negotiation process in mid-June,” explained the Secretary of State for the Treasury, reinforcing that “this is the perspective.”