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AVH - Avianca Holdings SA News Story

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Last Trade - 08/05/20

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £2.53bn
Position in Universe th / 6858

UPDATE 1-U.S.-Brazilian investor seeks to rescue Portugal's airline TAP

Thu 11th June, 2015 3:29pm
(Updates with comments, background) 
    LISBON, June 11 (Reuters) - A consortium led by 
American-Brazilian investor David Neeleman will take control of 
indebted Portuguese state airline TAP, ending a drawn-out sales 
process that has faced strong opposition from many unions. 
    The winning consortium is called Gateway and is led by 
Neeleman and Portuguese bus company owner Humberto Pedrosa. 
Neeleman is the founder of U.S. airline JetBlue  JBLU.O  and the 
CEO of Azul Brazilian airlines. 
    "We can't go against history," Prime Minister Pedro Passos 
Coelho told journalists shortly after the government confirmed 
the sale. 
    "We know what happened to most European flag carriers in 
recent years...if this process didn't take place it would have 
meant the liquidation of TAP in the medium-term." 
   The government is selling a 61 percent controlling stake in 
TAP now but will retain 34 percent which it can sell in two 
years. The remaining 5 percent is earmarked for staff. 
   Transport secretary Sergio Monteiro said the value of the 
transaction was between 354 million and 488 million euros  
($388-548 million), depending on TAP's performance this year. 
That total includes a 338 million euro capital injection by 
Gateway in TAP.  
    TAP is especially attractive to Brazilian investors because 
of the large amount of slots it holds on flights between 
Portugal and Brazil. Because of that many Europeans transit 
through Portugal to fly to Brazil.    
    The government will receive only 10 million euros 
immediately and a possible further 140 million euros in two 
years, depending on future options. 
    TAP's debts of more than 1 billion euros will be transferred 
to the new owners. Because of European Union state-aid rules, 
the government could not inject capital into TAP. 
    Brazilian-Colombian investor German Efromovich, who controls 
Latin America's Avianca  AVT_p.CN , had also presented a bid for 
Portugal's flag carrier. He also tried to buy TAP in a previous 
attempted sale in 2012. 
    TAP was hit by a 10-day pilots' strike last month. After a 
strike threat at Christmas, the government guaranteed future 
buyers would be barred from laying off workers en masse as long 
as the state remained a shareholder. 
    The government had to invoke a "public interest" clause to 
unblock the process after a court injunction this month. The 
leader of the main opposition Socialists, Antonio Costa, has 
been critical of the selloff and threatened too take legal 
measures to prevent the state from losing control of TAP. 
($1 = 0.8901 euros) 
 
 (Reporting By Sergio Goncalves, writing by Axel Bugge; Editing 
by Keith Weir) 
 ((axel.bugge@thomsonreuters.com; +351-213-509-201; Reuters 
Messaging: axel.bugge.thomsonreuters.com@reuters.net)) 
 
Keywords: PORTUGAL TAP/
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