Air France-KLM takes first formal step to apply for TAP privatisation
The Franco-Dutch group is the first to announce that it has submitted its manifestation of interest to Parpública to participate in the reprivatisation process of the Portuguese airline.
On Tuesday, the Air France-KLM group became the first to submit its expression of interest in participating in the privatisation process of TAP to Parpública, as provided for in the specifications for the operation.
“Air France-KLM submitted its expression of interest in participating in the privatisation process of TAP to Parpública on Tuesday, before the deadline (22 November)”, the Franco-Dutch group said in a note sent to ECO. “Once again, Air France-KLM’s strong and continued interest in this process has been demonstrated. We look forward to the next steps”, it added.
Compliance with this first formal step was already expected, as the company has repeatedly expressed its interest in acquiring a minority stake in the Portuguese flag carrier.
“We are definitely interested. We intend to formally submit our expression of interest in acquiring a stake in TAP, and this should happen by the end of the month”, said Ben Smith, CEO of the Franco-Dutch group, during the presentation of the Q3 results on 6 November.
The Air France-KLM Group has been full of praise for TAP, particularly for its position in the Brazilian market. At a meeting with Portuguese journalists at the end of September, the CEO said that if his group wins the privatisation bid, it will strengthen the Portuguese company’s position in Brazil and integrate it into the lucrative joint venture with Delta on routes to the United States.
The manager also guaranteed that the brand, headquarters and strategic routes would be maintained. He also stressed that, in order for the capital injection to generate synergies, the Air France-KLM group would have to retain management control.
In July, the Portuguese government approved the reprivatisation of 49.9% of TAP, including 5% for employees. The specifications limit candidates to airlines with an annual turnover of more than €5 billion.
Expressions of interest in the sale must be sent to Parpública by 22 November. In addition to the Air France-KLM group, the IAG group (owner of British Airways and Iberia) and the Lufthansa group are also expected to enter the race. The Executive has stated that there are other interested parties, including some from outside Europe.
Once the deadline for expressions of interest has passed, Parpública has 20 days to submit a report to the Ministries of Finance and Infrastructure that includes validation of compliance with the requirements to participate in the operation. Interested parties that pass the test will be invited to submit non-binding proposals.
Parpública has Bank of America Europe and Portugal’s CaixaBI as financial advisers and Uría Menéndez as legal adviser.
