Portuguese govt. increases stake in TAP airline to 50%

Portugal's new Socialist government has increased its stakes in the country’s national airline, TAP, to 50 percent from 39 percent, prime minister’s office says.

The office of Prime Minister Antonio Costa made the announcement on Saturday, saying that Lisbon will pay 1.9 million euros (USD 2.1 million) to take 11 percent from the 61 percent stake sold late last year to a private consortium, AFP reported.

The outgoing conservative government sold the airline’s stocks to the consortium, which is headed by US-Brazilian businessman, David Neeleman, founder of Brazilian carrier Azul, and his Portuguese associate, Humberto Pedrosa.

The move is apparently in line with the socialist prime minister’s pledge during election campaigns to start a new re-nationalization drive in the country.

Costa's new anti-austerity government has pledged to bring TAP back under state control.

After Saturday's announcement, Costa indicated that "the government will not interfere in the daily management of TAP, which will remain in the hands of private shareholders."

He had earlier signed an agreement to that effect with the Gateway consortium, which is headed by Pedrosa. The consortium will retain the other 50 percent stake in the airline.

According to Minister for Infrastructure Pedro Marques, the agreement requires that the 12 seats on the airline's board be divided evenly between the government and the consortium.

"TAP will become a stronger company and be in a better position to defend Portugal's strategic interests," said Costa, stressing that the upping of the government stake was entirely lawful.

After being elected prime minister, Costa promised that his government would "not permit the state's loss of more than half of TAP's capital."

TAP chairman, Fernando Pinto, has, however, warned that it would be "very difficult" to reverse the privatization, saying "180 million euros have been injected and I have already spent half."

TAP, which employs 10,000 people, has one billion euros in debt and cash flow problems.

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk