The Council of Ministers approved today a resolution that invites the bidders Air France-KLM and Lufthansa to present their binding offers to buy TAP in the privatisation process’s final phase.

The Minister of State and Finance Joaquim Miranda Sarmento noted the operation’s strategic relevance to the country and the interest of two of the largest European aviation groups, stressing TAP and the Portuguese economy’s attractiveness to foreign investment. 

In statements after the Government’s meeting, the Minister noted “the strategic importance for the country where this process will include TAP in a major European civil aviation group”, underlining that “two of the three largest European airlines are in the race and this shows the company’s attractiveness, as well as that of the country.”

Process meets deadlines and enters the decisive phase

On the same occasion, the Minister of Infrastructure and Housing Miguel Pinto Luz indicated that the second stage of the process is thus completed with the analysis of the non-binding offers delivered by 2 April and that the two bidders now have 90 days to submit their binding offers.

According to the Government official, Parpública’s final report confirmed that the two offers meet the requirements in the specifications and are in line with the criteria set by the Government, enabling the transition to the following phase.

The process ran “within the timeframe, in its time and shape”, reinforcing the commitment towards swiftness take non by the Executive and considered essential to guarantee future growth conditions for the airline.

“By strictly abiding by the schedule, we always said so and this is very important, we reiterate the commitment to having a swift process”, he noted, adding that “we are talking about two industrial plans that are quite close, quite equivalent, very ambitious, and in line with the strategic requirements imposed by the Government.”

Strategic criteria and sale model

The offers put forward show an alignment with the strategic priorities set by the Government, to wit:

• Strengthening air connectivity, including the autonomous region, the communities abroad and the Portuguese-speaking countries
• Expanding national airport operations with a focus on Porto
• Enhancing the maintenance and engineering hubs in Portugal
• Investing in the fleet
• An ambitious growth plan for the next ten years
• Commitment to sustainability

The Government intends to sell up to 49.9% of TAP’s share capital, 44.9% of which to a renowned investor and up to 5% reserved for workers. The final decision will be down to criteria such as price, industrial plan, connectivity, and the buyer’s financial capability.

Final decision set for the summer

The bidders will now have access to TAP’s internal information for their due diligence and the process to submit the binding offers will be completed in July.

After that, Parpública will draft the evaluation report in August, allowing the Government to make the final decision on the buyer in a Council of Ministers meeting between the end of August and start of September.