Econostrum | Economic News in the Mediterranean



The Portuguese government nationalises the airline TAP

The Portuguese State now owns 72.5% of TAP (photo: B.L.)
The Portuguese State now owns 72.5% of TAP (photo: B.L.)
PORTUGAL. The Portuguese government's threat was not a bluff. Marcelo Rebelo de Sousa decided, on the evening of Thursday 2nd July 2020, to renationalise TAP (Transportes Aéreos Portugueses). The Portuguese Prime Minister raised the State's share of the capital in the airline company from 50 to 72.5%. A decision taken following the refusal of its private shareholders to accept the Lisbon conditions (including an increase in its control power) in exchange for a loan of up to €1.2 billion.

"TAP's activity is of enormous strategic importance for the country", commented Joao Leao, Portuguese Finance Minister, explaining according to the Portuguese television channel TSF that he wanted to "avoid the collapse of the company" through this intervention.

The 12.5% stake was acquired from the American David Neeleman, the main private shareholder, who agreed to withdraw completely from TAP's capital. This led to the immediate departure of CEO Antonoaldo Neves, whose successor's name is not yet known. The remaining shares are held by Portugal's Humberto Pedrosa (22.5%) and the airline's employees (5%).

Pinned down by the Covid-19 pandemic at the end of March 2020, the company posted a net loss of €395m in the first quarter of 2020.

TAP had been 61% privatised in 2015. Then, in 2016, the Portuguese state raised its stake to 50%, with the Atlantic Gateway consortium (David Neeleman and Humberto Pedrosa) holding a 45% stake and the employees 5%.

Frédéric Dubessy

Friday, July 3rd 2020

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