Prosecutors back TAP holding’s insolvency as non-culpable

Portugal’s Public Prosecutor has concluded that the insolvency of TAP’s former holding company, now called Siavilo, should be classified as accidental rather than culpable, in a setback for Brazilian airline Azul as it seeks to recover a €189 million claim. The court will make the final decision in a dispute tied to TAP’s past privatisation and restructuring.

According to TAP’s first-half financial statements, the insolvency administrators said on May 4, 2026 that Siavilo’s insolvency should be treated as fortuitous. The Public Prosecutor reached the same conclusion on July 10, 2026, saying the insolvency should be classified as “fortuita e não culposa”. TAP said the two opinions were aligned and that the court must now decide whether to rule immediately or first notify the debtor and any parties that could be affected by a possible culpable insolvency finding.

Azul filed its case in Lisbon’s commercial court in November 2025, arguing that the removal of assets from the former TAP SGPS — including stakes linked to TAP SA, Portugália and Cateringpor — and the holding company’s insolvency were part of a plan designed to block repayment of its credit. The debt dates back to 2016, when Azul and Parpública lent €90 million and €30 million respectively to TAP SGPS under a recapitalisation plan agreed during an earlier privatisation. Azul now claims €189 million on the bonds, which matured in March 2026 and carried 7.5% compound interest.

The dispute escalated in 2024, when Azul sought recognition of loan guarantees that included TAP’s Miles & Go loyalty programme, which TAP SGPS rejected. In November that year, TAP SA and Siavilo went to court seeking to have the bond loan treated as shareholder financing, which would subject it to the holding company’s losses. In March 2026, Azul also sued TAP SA directly for payment of the €189 million, arguing that TAP breached contractual obligations by failing to put in place the agreed security package. TAP said in its half-year report that it filed its defence in that case on May 13, 2026.

TAP itself requested Siavilo’s insolvency, which was declared by a Lisbon court in August last year. Creditors have claimed about €1.35 billion against the holding company, including €1.11 billion owed to TAP, and creditors approved the company’s liquidation in October. At the time, its balance sheet showed €23.8 million in deposits as its only asset.

Originally published at Eco.pt