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Gateway consortium wins bid for TAP Air Portugal

Xinhua, June 12, 2015 Adjust font size:

A consortium led by U.S.-Brazilian investor David Neeleman won a 61 percent stake in airline TAP Air Portugal on Thursday as part of the Portuguese government's privatization plan.

The decision was made during a council of ministers meeting on Thursday.

Neeleman, founder of Azul Linhas Aereas Brasileiras SA, formed a partnership for the bid with Portuguese investor Humberto Pedrosa, owner of the Barraqueiro transport group. They both own the Gateway consortium.

The government said on Thursday that it will receive between 354 million euros (about 400 million U.S. dollars) and 488 million euros for the sale, depending on the company's performance.

The value of the transaction is "measured through the capitalization, through the price paid for stakes and for the option of buying and selling."

This means the government cannot yet determine the amount of money it will receive through the sale of TAP in the next two years, Secretary to the Treasury Isabel Castelo Branco said during the press conference following the cabinet meeting.

Secretary of State for Transport Sergio Monteiro said the inflow from the sale was "reduced" but still "important."

Neeleman was challenged by Avianca owner German Efromovich, who also presented his improved bid on Friday for the indebted carrier and was the sole bidder for the airline in 2012, when his offer failed due to not meeting the requirements.

TAP's sale was part of an agreement the government made in 2011 when it signed a 78 billion euros bailout with the European Central Bank, the International Monetary Fund and the European Commission.

The Portuguese government has faced constant strikes and protests against the sale and opposition parties have threatened to take legal action on numerous occasions.

Prime Minister Pedro Passos Coelho on Thursday praised the government for its "courage" for going ahead with the sale, pointing out that it was the only way to save the company.

The Portuguese government, which is facing elections in autumn, says the privatization will help the company expand, after TAP saw losses amounting to 85.1 million euros in 2014. (1 euro = 1.13 U.S. dollars) Endit