LISBON Portugal on Thursday named Synergy Aerospace, owned by Brazilian airline entrepreneur German Efromovich, as the sole potential buyer of its struggling national carrier TAP.
The sale of TAP, which is weighed down with an estimated 1.2 billion euros of debt, is part of a disposal of state assets required under Portugal's 78 billion-euro EU/IMF bailout.
Through Synergy, Efromovich controls Colombia's Avian airline, AviancaTaca VAT_p.CN, a tie-up with El Salvador's Tack, as well as the separately-operated Avian Brazil.
The AviancaTaca group is one of Latin America's leading commercial carriers with more than 100 routes in 14 countries.
State Secretary for Transport and Public Works Sergio Monteiro said Portugal would work on a binding bid with Synergy. The government hopes to seal a deal by the end of the year and complete it in the first quarter of 2013.
Monteiro said 10 companies showed interest in the privatization, but did not name them. Previously, British Airways owner International Airlines Group (IA) (ICAG.L) and Germany's Lufthansa AG (FRAG.DE) had expressed interest.
Efromovich's aggressive growth plans in Latin America have piled pressure on Brazil's two biggest carriers, Gold Lin has Aeneas (GOLL4.SA) and the TAM unit of regional group LAT Airlines.
Analysts say TAP's routes to Brazil -- Latin America's largest country and a former Portuguese colony -- are its key selling point.
The airline, with a fleet of 55 Airbus aircraft, carried 9 million passengers last year.
As part of the privatization process, Portugal has already sold large stakes in its two electricity companies.
The government is also preparing to sell its ANA airport handling company by year-end.
Experts believe TAP's sale is unlikely to generate much new cash for the state as the proceeds would have to pay off its debts. (Reporting By Andrei Khalip, additional reporting by Brad Haynes; Editing by David Cowell)