Avianca (AV, Bogotá) Holdings board chairman Germán Efromovich has pulled out of the race for a controlling majority stake in TAP Portugal (TP, Lisbon), currently set to undergo privatization. The Reportur news site says his decision reportedly came after the Portuguese national carrier's announcement last month of a EUR46 million (USD50.4 million) net loss for 2014, its first such posting after five consecutive years of profit.

With Lisbon now unable to provide it with funds and with Portuguese bank-backed loans difficult to secure, TAP has begun to consolidate its finances ahead of the beginning of the process. As a result, the ultimate winner of the tender will have to assume responsibility for TAP's financial liabilities and obligations, estimated to stand at EUR1billion (USD1.09billion).

As part of the terms and conditions for the country's 2011 EUR78 billion bailout package signed with multilateral institutions, Portugal is to divest its control of TAP retaining only a 34% minority shareholding while 5% will go to TAP employees. 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.

The controlling 61% stake in the airline is to be sold off to a strategic investor with Brazilian carriers Azul Linhas Aéreas Brasileiras (AD, Sao Paulo Viracopos) and Gol Linhas Aéreas Inteligentes (G3, São Paulo Congonhas), Delta Air Lines (DL, Atlanta Hartsfield Jackson), Virgin Atlantic (VS, London Heathrow), Lufthansa (LH, Frankfurt Int'l), the International Airlines Group (IAG), and three private equity funds including Apollo Global Management, all said to have expressed an interest. Another company that was interested, but which has so far has not signed a confidentiality agreement, is Air Europa (UX, Palma de Mallorca). The Spanish carrier's parent Globalia Corporacion is a shareholder in Portuguese groundhandling firm Groundforce which is majority owned by TAP.

Avianca's parent, Brazilian firm Synergy Aerospace, was the only contender in Lisbon's first attempt at privatizing TAP in late 2012, However, despite winning the tender, it failed to provide the requisite financial guarantees leading to the deal's collapse.