August 2, 2012 / 2:17 PM / 8 years ago

Portugal OKs TAP sale, ideally as flag carrier

LISBON, Aug 2 (Reuters) - Portugal on Thursday gave the go-ahead to the long-planned privatisation of airline TAP, saying it favoured a buyer who will maintain its status as the country’s flag carrier.

The privatisation is part of a state property sell-off agreed under a 78 billion-euro EU/IMF bailout for debt-ridden Portugal and has been scheduled to occur this year.

The country has already successfully sold large stakes in its two electricity companies.

“At stake in this privatisation process is a company with strong links to our country, links that should be maintained,” the cabinet said in a statement after its weekly meeting authorised the go-ahead.

“It is therefore relevant to favour keeping its flag company characteristics.”

A TAP spokesman said: “It is a branding issue to keep a Portuguese brand in the market here and in Portuguese-speaking countries.

“It’s not a legal issue, all the landing rights will go with the company to the buyer.”

The government provided no timeframe for the sale, which it said would involve a capital increase and direct sale of shares to one or more investors, as well as a separate public offering of an unspecified number of shares reserved for employees.

TAP, with a fleet of 55 Airbus aircraft, carried 9 million passengers last year. Analysts say its routes to Brazil — Latin America’s largest country and a former Portuguese colony — make it attractive.

The carrier has attracted interest from several international operators, including British Airways owner International Airlines Group (IAG), thanks to its fast-growing routes to South America and Africa.

Germany’ Lufthansa AG has said it may be interested in TAP.

The government is also preparing to sell its ANA airport handling company by year-end.

Jornal de Negocios newspaper said on Wednesday the state hopes to obtain over 1.5 billion euros from the sale of ANA and TAP. The carrier’s sale alone is mostly expected to cover its hefty 1.2 billion euro debt, but is unlikely to bring a lot of new cash, it said.

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