It was a rescue that was expected. While the coronavirus crisis strongly impacted the Portuguese airline TAP, the government of Antonio Costa decided to move forward with the nationalization of the emblematic company. TAP will be nationalized because private shareholders do not accept the conditions imposed by the Portuguese government regarding the loan of 1.2 billion euros to the airline. After losing 100 million euros in 2019 and being hit hard by the covid-19 crisis, the nationalization of TAP is likely to be expensive. Lisbob, the expatriate assistant in Portugal, tells you all about the nationalization of TAP.
TAP airlines will be nationalised
According to the newspapers Espresso and ECO, the Portuguese airline TAP will be nationalized. After a board of directors which lasted until very late Monday evening, the proposal with the conditions required by the Portuguese state to proceed with a loan of up to 1.2 billion euros was not accepted by the directors appointed by Atlantic Gateway of David Neeleman and Humberto Pedrosa.
Now, only a last-minute turnaround can prevent the nationalization decree from being published, which is likely to happen at any time.
Atlantic Gateway, which owns 45% of the TAP, rejected this Monday evening the conditions of the loan that the Portuguese state would grant. A loan for which even the European Commission had already given the green light. The main reason for the refusal is the request by the Portuguese government for 217 million to be transferred to share capital, a condition that David Neeleman did not accept.
Portuguese Minister of Infrastructure Pedro Nuno Santos confirmed to Parliament this morning that the TAP board of directors had failed to complete the loan agreement on Monday evening. "We needed eight votes for. The proposal did not succeed with the abstention of private shareholders," he said.
"I hope that an agreed solution will be found which will guarantee peace for the TAP and avoid future disputes," he added, ensuring that "we are ready for anything". "We will not give in to our terms and we are ready to step in and save the business."
The nationalization of TAP would cost Portugal's finances dearly for an airline that was already losing a lot of money before the covid-19 crisis. In 2019 the losses of the Portuguese airline company already amounted to 100 million euros (95.6), after losses of 58.1 million in 2018. As often, the profits are privatized while the losses are nationalized. However, Portugal cannot afford to lose its flagship airline, which brings in half of its tourists.
