Portuguese government to ignore country’s court’s suspension of TAP sale

On the 17th May it was revealed that the Portuguese government had received three offers for their share of Transportes Aéreos Portugueses, SGPS, S.A (TAP). The government’s 66% stake in the airline is to be split as 61% available to investors and 5% to airline staff. However the 5% has already been a bone of contention and the reason behind a recent strike which cost the airline €32m. This did not help the company’s financial situation which, in the penultimate tax year lost €5.9m, followed by €85.1m in 2014. Current debts are stood to stand at €1.06bn. The strike sought for a greater stake in the airline to be offered to staff, and security measures put in place to guarantee jobs.
The three bids are understood to have been from David Neeleman, founder of Azul Linhas Aereas Brasileiras SA, Brazil’s third-biggest airline, German Efromovich, owner of South America’s Avianca Holdings SA airline brands, and Portuguese investor Miguel Pais do Amaral, though the final decision was to be made between offers only from Neeleman and Efromovich. The sale faces opposition from politicians in Portugal who say TAP is a strategic company that should remain a state-owned asset. However the suspension of the disposal of the airline has come about as a consequence of a court ruling on a citizens’ association’s demand the sale be stopped. Despite this the government has made its position perfectly clear on the matter and intends to proceed all the same, invoking legislation to support its cause by classifying TAP’s sale being in the public interest, which would overrule any court decision.
The sale was suspended on Wednesday by Portugal’s Supreme Administrative Court on the grounds that the government had failed to contract two separate institutions to produce an evaluation of the airline prior to a sale taking place. Transport Secretary Sergio Monteiro ‘s response to the ruling was very clear: “We have no intention of changing the deadline from Friday for the proposals,” he told journalists, although the sale is additionally opposed to by some TAP workers and unions.