TAP to receive another €100 million for covid losses
Brussels' authorisation for a new tranche to TAP is expected soon. The rest of the €536 million that the company should receive this year depends on the approval of the restructuring plan.
With less than two months until the end of the year, the Portuguese government is still awaiting the green light from Brussels to inject into TAP the €536 million of capital for 2021 that are still missing. According to what ECO learnt from a source connected to the process, authorisation is expected soon for the State to pay around 100 million in compensation for the impact of Covid-19. The rest, which is the largest part, depends on the “OK” of the European Commission to the restructuring plan.
The airline had already received 462 million in May as part of the compensation for losses caused by the pandemic, in the period between March 19 and June 30 2020. Now it will receive €100 million more, still related to the impact of Covid-19 in 2020. All that is missing is the green light from Brussels, which is expected soon.
Around €436 million of the €998 million foreseen for this year and stated in the proposed State Budget for 2022 are still missing. Money that, unlike the Covid compensation, depends on the green light to the restructuring plan approved by the Government to move forward.
Authorisation for the first slice of compensation for the effects of Covid-19 came in April, with TAP’s capital increase taking place the following month. With the operation, the state now owns most of the aviation business, with the dilution of Humberto Pedrosa’s and the employees’ stakes. The businessman now holds 1.8% of the capital and the workers 0.4%.
With this new injection by the State, there will be a new dilution of capital. It may be immediate, if the option falls on a new capital increase of 100 million, or deferred, if the money comes in through a loan convertible into shares.
