November 13, 2014 / 4:10 PM / 5 years ago

UPDATE 1-Portugal to sell up to 66 pct of airline TAP in relaunched privatisation

(Adds quotes, details, background)

By Sergio Goncalves and Daniel Alvarenga

LISBON, Nov 13 (Reuters) - Portugal plans to sell its controlling stake in flag carrier TAP to one or more large investors in a relaunch of the privatisation of the indebted airline, the government said on Thursday.

Secretary of state for transport Sergio Monteiro said up to 66 percent of TAP will be sold, with a 61 percent reserved for one or several large investors.

“The state does not intend to obtain financial gains from this privatisation, it wants to guarantee that TAP is adequately capitalised,” Monteiro told a news briefing.

Monteiro added the airline had debts of some 1 billion euros ($1.3 billion) and the state was banned from injecting fresh capital under EU rules.

Five percent of the airline’s equity will be reserved for workers. The government will retain 34 percent and may exercise an option to sell that stake two years after the privatisation.

Monteiro said there was no timetable yet for the sale.

Economy Minister Antonio Pires de Lima has said there were various potential buyers interested in TAP. Germany’s Lufthansa and Spanish group Globalia have said they were following developments around the privatisation, while Portuguese entrepreneur Miguel Pais do Amaral has also expressed interest.

In 2012, the government rejected the only valid offer for TAP, made by Latin American tycoon German Efromovich, owner of AviancaTaca, citing his failure to meet financing requirements.

“We are now more optimistic and all the information collected allows us to face this process with redoubled confidence that it will be successful. But we will only know when we receive the formal proposals,” Monteiro said.

The privatisation is part of a sale of state assets required as a condition of Portugal’s three-year EU/IMF bailout, which ended in May.

Lisbon has raised around 9.4 billion euros via sell-offs since the start of its bailout in 2011, having overshot its privatisation target during the rescue programme.

In September, the government sold waste management firm EGF for 150 million euros to SUMA, a consortium led by construction company Mota-Engil, and also sold the remaining 31.5 percent stake in postal firm CTT, raising 343 million euros.

TAP is among several privatisations yet to be completed, a list also including some public transport companies and concessions. (1 US dollar = 0.8012 euro) (Writing by Andrei Khalip; Editing by David Holmes)

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