The LATAM Airlines Group and Globalia Corporacion have officially declared themselves out of the running for a stake in TAP Portugal (Lisbon) which the Portuguese government is currently trying to privatize.
Mauricio Amaro, the chairman of LAN Airlines and TAM Linhas Aéreas' parent holding firm LATAM, told Reuters newswire after an AGM this week that despite the Brazilian government's encouragement, Lisbon's conditions for a stake in the Portuguese national carrier were not attractive.
"Things change, but under current market conditions and what we know of the TAP privatisation, today I would say that LATAM will not participate in this privatisation," he said.
Juan José Hidalgo, the president of Spanish carrier Air Europa (UX, Palma de Mallorca) and of parent Globalia Corporacion, echoed Amaro's sentiments at another news conference in Miami.
"We have abandoned the idea," he was quoted by Spain's Preferente newspaper. "You cannot acquire a company with such high debt and that is so difficult to manage. Unable to conform to the tender's requirements, we gave up."
Earlier this month ch-aviation reported that Avianca (Bogotá) Holdings board chairman Germán Efromovich had also pulled out of the race citing the airline's poor financial footing.
As part of the terms and conditions for the country's 2011 EUR78 billion bailout package signed with European and global financial institutions, Portugal is to divest its control of TAP retaining only a 34% minority shareholding while 5% will go to TAP employees. However, the successful candidate will also have to bear responsibility for recapitalising the company, whose debts are estimated to stand at above EUR1 billion (USD1.1 billion).
Government will only be able to sell off its remaining 34% stake after a two-year period, and in consensus with the carrier’s unions.
