* Row between Lisbon and JP Morgan involved threats of
* Lisbon renegotiating up to 3 billion euros in swap deals
* Privatisation part of sell-offs dictated by bailout
LISBON, June 11 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
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
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
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.