Competition authority gives ‘green light’ to state control of TAP

  • Lusa
  • 21 October 2020

Competition authority has given the 'green light' for the reinforcement of the state in TAP, with the acquisition of 22.5% of the company's capital.

Portugal’s Competition Authority (AdC) has given the ‘green light’ for the reinforcement of the state in TAP, with the acquisition of 22.5% of the company’s capital, in addition to the 50% already held by Parpública, the state investment management company, according to a notice published on Wednesday.

“In exercise of the powers conferred on it […], it has decided not to oppose the concentration […] as it is not likely to create significant impediments to effective competition in the relevant markets identified,” the council said in the decision published on the AdC website.

On 2 July, the government announced that it had reached an agreement with TAP’s private shareholders to hold 72.5% of the capital of the airline, for €55 million.

In early August, shareholders of Brazilian airline Azul, led by David Neeleman, approved the agreement to leave TAP, including the elimination of the rights to convert into shares the €90 million loan from Azul to TAP in 2016, and the sale of Global AzurAir Projects’ position in TAP.

In addition to the €946 million interest-bearing loan in favour of TAP – to which can be added €254 million, without the state being bound to this provision – it involved the acquisition by the Portuguese state of shareholdings, economic rights and a part of the ancillary payments of the current shareholder of TAP SGPS, Atlantic Gateway, SGPS, Lda.

In this way, the Portuguese State is left with a total share-holding of 72.5%, the remaining capital being held by the businessman Humberto Pedrosa (22.5%) and the employees (5%).

The TAP Group recorded a loss of €606 million in the first half of the year, of which €582 million related exclusively to aviation.