Portugal names JPMorgan adviser on post service sale despite row
* Row between Lisbon and JP Morgan involved threats of lawsuits
* Lisbon renegotiating up to 3 billion euros in swap deals
* Privatisation part of sell-offs dictated by bailout
LISBON, June 11 (Reuters) - Portugal appointed JP Morgan as financial advisers in the planned privatisation of the national postal service, in a move that bodes well for resolving cash-strapped Lisbon's row with the U.S. bank over potentially costly hedging contracts.
State holding company Parpublica, which owns the CTT postal service, said on Tuesday it had picked JP Morgan Chase & Co and state-owned bank CGD after analysing various proposals to advise on the sell-off promised by Lisbon to its international lenders under the terms of an EU/IMF bailout.
The choice of JP Morgan is the first sign of reconciliation between Lisbon and the U.S. investment bank after a tussle over derivatives contracts that Lisbon described as "toxic" that the bank sold to Portuguese state-owned companies by various banks.
Lisbon is trying to stem potential losses of up to 3 billion euros from the swap contracts sold to companies such as the Lisbon and Porto Metros. The government and JP Morgan had each threatened legal action over the matter but eventually resumed talks.
Some local media said earlier that the government had been awaiting the outcome of the swaps renegotiation before advancing with the CTT sell-off and that JP Morgan's application for the advisory role hinged on progress in the talks. The Expresso weekly said a tentative deal on swaps was reached last week.
The finance ministry, Parpublica and JP Morgan officials all declined to comment on the issue.
The privatisation is part of a wider state property sell-off by Lisbon ordered under the country's 78 billion euro EU/IMF bailout.
Unlike fellow bailed-out nation Greece that earlier on Tuesday said it would ask lenders to lower its asset sales goals after failing to sell natural gas firm DEPA, Portugal has already shot past its end-2013 target to raise 5.5 billion euros.
After pocketing over 6.4 billion euros from selling stakes in airport operator ANA, power firms EDP and REN , this year it hopes to sell CTT, the cargo unit of Comboios de Portugal railway company, CGD's insurance arm, and to relaunch the privatisation of airline TAP.