State injects more money into TAP if banks charge high interest rates

  • ECO News
  • 11 February 2021

TAP will need more money and the Portuguese government is prepared to make a direct loan or inject capital into the national carrier if the interest rates are considered too high.

The government is prepared to make a direct loan or inject more capital into TAP if the interest rates charged by banks are considered too high, reports Público on Thursday.

The national airline has survived in recent months on the 1.2 billion euros given by the state, but it will need more money. The plan was for a public guarantee to help TAP get a loan (estimated at 970 million euros), but plans may change depending on the level of interest, according to Público.

If the new injection of public money or direct loan became a reality, TAP would avoid an increase in its financial liabilities, with this strategy depending on Brussels’ authorisation. Regarding the 1.2 billion euros already invested in the national carrier, the amount will be converted (in full or in part) into the company’s share capital, strengthening the State’s stake to close to 100%.