Portugal Reaches Agreement ‘in Principle’ With TAP Shareholders

(Bloomberg) -- The Portuguese government said it reached an agreement “in principle” with TAP SGPS SA’s private shareholders that can allow the airline to receive a planned rescue loan.

The government and TAP’s private shareholders are currently discussing legal and technical details of that initial agreement, and the process may be completed in the next few hours, government Minister Mariana Vieira da Silva said after a cabinet meeting on Thursday.

If that agreement isn’t completed, the cabinet can meet again “immediately” to approve a plan to nationalize the airline, Vieira da Silva said.

Like other carriers, TAP was forced to halt most of its flights due to coronavirus-related travel restrictions. The European Commission has already approved a 1.2 billion-euro ($1.3 billion) rescue loan to help the airline meet immediate liquidity needs. The rescue loan has several conditions that need to be approved by TAP’s private shareholders before it can go ahead, Infrastructure Minister Pedro Nuno Santos said on June 10.

The Portuguese state already controls 50% of TAP. Airline entrepreneur David Neeleman and Portuguese investor Humberto Pedrosa jointly own another 45% through the Atlantic Gateway venture. The government has previously said it won’t let the flag carrier collapse and won’t rule out any instruments it can use to intervene.

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