Economy minister has no details of state takeover of flag carrier TAP

The Economy Minister said on Wednesday he had no details about the operation to reduce capital in TAP and subsequent full state control later this year but reiterated the strategic importance of the airline to the Portuguese economy.

“Just as with Caixa Geral de Depósitos (bank) we had to demonstrate to the European Commission that the recapitalisation and restructuring plan ensured future viability, we also have to do so with TAP. Whether this will determine a need for a capital reduction to absorb losses and then a new capital increase, whether this will be done entirely by the public sector or will also be accompanied, is a detail that I do not have at this time,” said minister Pedro Siza Vieira.

The minister was asked if he confirmed the news advanced today by Público newspaper that the state will become the sole shareholder of TAP this year and that the European Commission says there will be a reduction in the airline’s capital, to clean up losses, with the state then taking over 100% of the group, in which it will invest €2.726 billion in capital until 2022.

According to the news advanced by Público, the operation will take place this year and will involve private shareholders, including businessman Humberto Pedrosa and small investors and workers.

The information is contained in a European Commission document, dated July 16 and now published on the EU executive’s website, after confidential information had been removed.

“The member states of the European Union cannot put money into companies that do not have a perspective of viability in the long term. Public money should not be used to keep an unviable company in business, competing with other companies that are healthier, but which do not have access to public resources so, therefore, what we need to demonstrate is that TAP, after being restructured, continues to be a viable company,” stressed Pedro Siza Vieira.