Portugal’s government is expected to announce today which aviation giant it has chosen to take a major stake in TAP Air Portugal, bringing one of the most closely watched stages of the airline’s reprivatisation process to an end.
The choice has been narrowed down to Lufthansa and Air France-KLM, which submitted their final improved binding offers to state holding company Parpública on September 30.
A Council of Ministers meeting is scheduled for this Wednesday morning, with the selected bidder expected to be announced afterwards.
At stake initially is a 44.9% stake in TAP for a strategic investor, with a further 5% reserved for employees. Any portion of the employee allocation that is not taken up could ultimately be acquired by the winning investor, potentially taking its holding to 49.9%.
The Portuguese State will retain majority control.
Both bids were improved after the government concluded that the earlier offers were extremely close in their overall assessment and invited the two airline groups into another round of negotiations.
Bloomberg reported that both improved bids valued the prospective investment at more than €1 billion, although the individual amounts have not been publicly disclosed.
Price, however, is only one part of the decision.
The government is also assessing the bidders’ plans for TAP’s fleet, investment, connections through Portugal, aircraft maintenance, sustainable aviation fuels and employment commitments.
Michael Bruxo
Journalist for the Portugal Resident.