Portugal hires Ernst & Young, Finantia to value airline TAP before planned stake sale

Portugal hired Ernst & Young and Banco Finantia SA to carry out valuations of TAP SA as part of a plan to sell a stake in the state-owned airline.

No details about timing were included in the emailed press release from Portuguese state holding company Parpublica. Finance Minister Fernando Medina had said in April that the decree that starts TAP’s privatization process could be approved “around” July.

The government plans to retain a stake in TAP after the privatization to help ensure “strategic objectives,” including the goal of the airline keeping its hub in Portugal, Prime Minister Antonio Costa reiterated in March. The government regards TAP as strategic because its flights link a global diaspora of the country’s citizens — including the biggest transatlantic network serving Brazil — and also connect the mainland to the Madeira and Azores archipelagos in the middle of the Atlantic.

Larger airlines Air France-KLM, Deutsche Lufthansa AG and IAG, the parent company of British Airways and Iberia, have said they may look at TAP.

It won’t be the first time Portugal has sold a stake in TAP. In 2015, the government agreed to sell 61% of TAP to Atlantic Gateway, which grouped investors including airline entrepreneur David Neeleman. A few months later, Costa’s newly elected Socialist government partly reversed TAP’s privatization, increasing its holding to 50% from 34%.

Like other airlines, TAP had to halt most of its operations due to the coronavirus outbreak and got rescue funding from the government. In 2020, the government agreed to buy Neeleman’s indirect stake in TAP and increased its holding to 72.5% before becoming the carrier’s sole owner in December 2021. The European Commission in 2021 approved more than 2 billion euros ($2.2 billion) of restructuring aid for TAP.