Confidence EC will agree to TAP restructuring plan by Christmas – João Leão

Finance minister João Leão revealed on Tuesday in Brussels that discussions with the European Commission on the TAP restructuring plan are in the final stages and said he expected the plan to be approved before Christmas.

“It has been going well [the negotiation with the Commission], in the sense that now we are practically in the final stage, and we hope in the coming weeks to conclude the negotiation. There was one or another point that was still under discussion, but in principle, everything will be concluded. The expectation is that by the end of the year it will be approved, so in that sense, if possible, it will be before Christmas”, he stated.

Leão, who was speaking to the press after attending the last Ecofin meeting of the year in Brussels, said he could not guarantee approval of the airline’s restructuring plan this month, but said that this was the government’s expectation, as “discussions are already sufficiently advanced,” with issues that were still open having been resolved at the outset.

“At this moment, we think that things are quite resolved. There was a question about an alternative source of funding, other than the State, and that question has been resolved. And there was also an issue on the table about the slots that the company had to give up, based on guidelines also from the Directorate-General for Competition [of the European Commission], and that issue I also think will be resolved,” he said.

Asked whether he could guarantee that there would be no losses for bondholders, Leão noted that the restructuring plan “does not involve any measure that will affect TAP bondholders.”

“On the financial side, the issues were already solved, there are no significant changes from what we had proposed. There is only the issue of considering additional alternative financing that was planned but not by the State, and on the other hand, there are more specific questions about the company’s operations that were being discussed, but nothing that would jeopardise the company’s bondholders,” João Leão said, adding that he did not see “the need” for any measures imposed by Brussels to change that framework.

The finance minister also stated that if approval of the restructuring plan is given in the coming weeks, which “is feasible”, this “will allow the government this year to help capitalise part of what was missing from the programme for 2021, and that is a very important sign and gives confidence that the company can have financial sustainability.