Privatization of Portuguese flagship carrier TAP approved by outgoing gov't

Portuguese outgoing center-right government said on Thursday it has approved the sale of a 61-percent stake in the country's flagship carrier TAP, bringing to the end of the long process of privatizing the state-owned company.

Portuguese State Secretary for the Treasury Isabel Castelo Branco told a press conference that the final sale of the TAP to the Gateway consortium ensures an immediate cash injection of around 150 million euros (161 million U.S. dollars).

Branco said a second payment of around 120 million euros will be in the form of convertible bonds due by late June 2016. If that payment is not made, the transaction would be reversed, she added.

Minister of the Presidency and for Regional Development Luis Marques Guedes said that the government had acted to secure TAP's immediate future.

He said TAP is facing imminent financial collapse and there is a risk of planes not getting refuelled and the salaries of many company employees not being paid.

The approval of TAP sale came only two days after the center-right minority government collapsed in a parliamentary vote on a motion rejecting government program presented by main opposition Socialist Party and its leftist alliance.

The PS, Left Bloc and Portuguese Communist Party has vowed to cancel the TAP privatization if President Anibal Cavaco Silva decides to let them take power in the next few days.

The TAP sale was part of an agreement the government made in 2011 when it signed a 78-billion euro bailout with the European Commission, International Monetary Fund and European Central Bank. (1 euro=1.08 U.S. dollars) Endit