Government to increase TAP Air Portugal stake | News

The Portuguese government has reached an agreement to increase its stake in struggling TAP Air Portugal to 72.5%.

Confirming the deal late on 2 July, Portugal’s minister of infrastructure and housing Pedro Nuno Santo said: “Finally… there are conditions to help TAP. It is an important moment.”

Nuno Santo states that the government will buy part of the David Neeleman-backed Atlantic Gateway Consortium’s shareholding in TAP for €55 million ($62 million).

TAP announcement

A Reuters report adds that under the deal, Neeleman’s consortium will no longer hold a stake in TAP. Alongside the 72.5% stake held by the government, Portuguese entrepreneur Humberto Pedrosa will take a 22.5% shareholding, while 5% will be held by employees, Reuters suggests.

The Portuguese carrier was 50% owned by the state, 45% by Neeleman’s consortium and 5% by TAP employees.

The Portuguese flag carrier has been experiencing severe financial difficulties amid the coronavirus pandemic.

The European Commission on 10 June approved a €1.2 billion state rescue loan for TAP to address “immediate liquidity needs”.

At the end of June, the carrier disclosed plans to further reduce its fleet after first-quarter net losses almost quadrupled to €395 million.

Since Neeleman’s Atlantic Gateway consortium took a share in TAP in 2015 under a privatisation programme, the Portuguese airline had undergone a dramatic restructuring, including an extensive fleet renewal and network expansion across the Atlantic.

In February this year, TAP sealed a non-corporate joint venture with Brazilian carrier Azul, in which Neeleman is the controlling shareholder.

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