Some Efacec bids mean state may recover some of the capital
This Thursday is the deadline for analysing the six binding proposals from national and foreign entities for the reprivatisation of Efacec that Parpública received.
Portugal’s minister of the economy said on Wednesday that most of the six proposals received for the purchase of Efacec provide for the total acquisition of the company and some open the possibility of the state recovering some of the capital it injected.
António Costa Silva was speaking at a hearing before the Economy, Public Works, Planning and Housing Commission as part of a PSD request on the Efacec reprivatisation process and a PS request on the execution of the government’s measures regarding Covid-19.
“We have to sell Efacec in its entirety. Most of the proposals we received are along these lines: they want the entire company. That’s where I’m reassured. Most of the consortiums that were presented have this basis,” the minister said in response to questions from the PSD.
This Thursday is the deadline for analysing the six binding proposals from national and foreign entities for the reprivatisation of Efacec that Parpública received, with the economy minister stressing he wants to end the process “as soon as possible”.
The minister said that the state plans to include a clause in the sale that stipulates “minimum charges for the state,” as well as seeking to “minimise the conditions” presented by the companies, such as the number of workers.
António Costa Silva specified that some of the six proposals include the possibility “for the state to recover some capital that it injected in the company” under certain conditions.
Later, in response to IL, he admitted that “it will be difficult” for the total amount the state injected in Efacec to be reflected in the sale price, but recovery mechanisms will be analysed, such as a part of the “free cash flow” to be shared with the state.
Questioned by the BE on whether the sale process may include a haircut (‘evaluation margin’, associated with a reduction in the value of an asset due to the company’s debt), Costa Silva declined to go into detail: “I think that we will share it later because we are at the peak of the analysis of the binding proposals that were presented to us”.
The minister said that, in general, the companies showed “acceptable demands,” and he was “pleased” that some of the potential buyers, “even international, want to preserve the Efacec brand”.
Costa Silva also pointed out that some consortiums and international companies intended to “inject money right away, and significant money, to maintain their capacity.
The governor explained that the state would “keep the six [proposals] under discussion and analyse each of them, some particularities, and then make the final selection,” expecting to have the final proposals for the acquisition of 71.73% of state capital in Efacec at the “end of March or the beginning of April.
“And from there, we can select what the future of Efacec will be,” he said, ruling out a scenario in which the company is not privatised but guaranteeing that in such an eventuality, faced with such an “important company,” it will be necessary to “find feasible solutions”.
In November last year, the government approved a new process of reprivatisation of the State’s 71.73% stake, with new specifications, after having announced on 28 October that the sale of Efacec to the DST group had not been concluded as “all the necessary conditions” for the sale agreement had not been met.