Groups interested in TAP privatization have up to 90 days to submit binding offers
Resource allocation, price, and competitive position will be main criteria for growth in ‘strategic platforms' routes to Azores and Madeira, the diaspora, and Portuguese-speaking countries.
Groups interested in the reprivatisation of up to 49.9% of TAP must submit binding and non-binding bids within 90 days, the government announced on Friday after approving the specifications for the partial sale of the airline. This deadline will be followed by possible negotiations.
Interested companies, which must have revenues exceeding €5 billion in at least one of the last three years, will first undergo a pre-qualification process lasting a maximum of 60 days.
‘From a technical point of view, particular importance will be given to the presentation of an appropriate and coherent strategic project, with guarantees of implementation and allocation of resources, which ensures the preservation and promotion of TAP’s growth, as well as the price,’ summarised the Ministries of Infrastructure and Housing and Finance.
‘This project should strengthen the company’s competitive position as a global air transport operator, in current and new markets, with particular attention to connections between the main national airports and the autonomous regions, the diaspora and countries and communities where Portuguese is the official language,’ adds the Executive.
From fleet and fuel to profitability: what are the criteria?
The analysis will also take into account the following points: strengthening the fleet, investment in maintenance and engineering, and a commitment to the production of sustainable fuels (SAF/e-SAF) in line with the National Roadmap for the Decarbonisation of Aviation.
‘The maintenance of any public service obligations will also be considered,’ note the offices of Miguel Pinto Luz and Joaquim Miranda Sarmento. ‘The maintenance of any public service obligations will also be considered,’ note the offices of Miguel Pinto Luz and Joaquim Miranda Sarmento.
“Proposals will be evaluated based on financial criteria, such as the value offered for the shares, guarantees of financial sustainability, TAP’s projected future profitability, and any alternative forms of payment, including performance bonuses and share exchanges.
The Government also stated that ‘the absence of constraints that hinder the completion of the operation, respect for labour commitments and collective regulatory instruments in force, as well as the prospect of a possible strengthening of the shareholder position in TAP will also be considered,’ referring to the second stage of reprivatisation.
Parpública will be responsible for the technical management of the process, namely the receipt, analysis and evaluation of bids, as well as the preparation of contractual instruments. All these phases will be monitored by the Special Monitoring Committee, chaired by economist and university professor Daniel Traça, with the participation of economists and university professors Luís Cabral and Rui Albuquerque.
The details come the day after the Council of Ministers gave the green light to a resolution defining the terms and conditions of the TAP reprivatisation process by approving the respective specifications.
The decree-law, published on 14 August in Diário da República, confirmed the reservation of a 5% stake for employees and clarified that if employees did not want the entire percentage, the remainder would go to the lead investor who purchases 44.9% of the airline.
The timetable the Government is working with indicates that the sale of 49.9% of TAP should be completed by July next year, which is the time frame for completing all stages, namely parliamentary review, the various dates for receiving non-binding and binding proposals, and final negotiations, as reported by ECO.
On 10 July, the government moved forward with the privatisation process of up to 49.9% of TAP’s capital. The decision ‘incorporates the opening up of the capital to one or more investors up to 44.9% and 5% to employees,’ according to the Prime Minister, who also assured that the process safeguards the Lisbon hub and that if the Government’s objectives are not met, the process can be suspended without any compensation.
In mid-August, Europe’s three largest aviation groups, Lufthansa, Air France-KLM and IAG, confirmed their interest in acquiring a stake in TAP, but warned that they would still analyse the conditions.