The state-owned company Parpública announced this Saturday, in a statement, that it had received “three declarations of interest” in the privatization of TAP, for which applications closed at 4:59 pm.
The state company responsible for managing the State’s holdings does not indicate in the statement which companies are interested, but so far the formal interest of Air France-KLM, Lufthansa and the International Airlines Group (IAG), owner of British Airways and Iberia, has been confirmed.
As part of the sales process, Parpública “now has 20 days to prepare, in a well-founded manner, a descriptive report of the interested parties who submitted their respective declarations of expression of interest, evaluating their compliance with the participation requirements”, adds Parpública.
Once the deadline for submitting expressions of interest has passed, Parpública will analyze the applications until December 12th, and prepare for non-binding proposals in this process, which foresees the sale of up to 44.9% of TAP’s capital, keeping 5% reserved for workers.
In July, the Government estimated that the TAP privatization process – which also includes Portugália, the TAP Health Care Unit, Cateringpor and SPdH (formerly Groundforce) – would take around a year, although the final schedule depends on regulatory authorizations.
Parpública will prepare a report that describes the interested parties and assesses whether they meet the requirements defined in the specifications.
These criteria include revenues exceeding 5 billion euros in at least one of the last three years, proven experience in the aviation sector, financial capacity and suitability.
After this evaluation, successful candidates will be invited to submit non-binding proposals, within a maximum period of 90 days.
These proposals must detail the purchase price of shares, how to obtain the necessary financial resources, as well as investment plans in strengthening the fleet, maintenance and engineering, investing in sustainable fuels, respecting labor commitments and strategic vision regarding a possible increase in shareholder participation.
Once the non-binding proposals phase is completed, Parpública will have 30 days to prepare a new report to submit to the Government.
If clarifications are requested from the proponents, the deadline will be suspended until the response or the end of the fixed period.
The Council of Ministers will select, based on Parpública’s report, the applications considered most appropriate and will invite the chosen proponents to present binding proposals in the third stage of the process, with a maximum period of 90 days.
The third stage of the process involves carrying out information and submitting binding proposals within a maximum period of 90 days, counting from the sending of the invitation.
The Council of Ministers may, however, determine in the invitation letter a deadline for submitting binding proposals of less than 90 days.
After the presentation of the binding proposals, Parpública will have 30 days to prepare a final report, a period that can be extended by the Council of Ministers upon a reasoned request.
Based on this document, the best proposal will be selected or a negotiation phase may begin to present improved and final binding proposals.
Once the selection is complete, the Council of Ministers will approve the final drafts of the sales contracts, which must be signed by the buyer within 15 days.
The State will then convene a general meeting of TAP to approve the deliberations necessary to complete the privatization and implement the agreed industrial and strategic plan.
If the 5% tranche allocated to workers is not fully subscribed, the future buyer will have the right of preference.