Portugal's Competition Authority finally has decided not to oppose the government's repurchase of TAP shares from Gateway, made necessary by a pledge by PM Antonio Costa that the taxpayer again would control the loss-making airline.
The Competition Authority approved the reversal of the sale by the PSD/CDS-PP government under Passos Coelho which gave Gateway the upper hand in a deal which netted the Treasury just €20 million and left the taxpayer underwriting over €1 billion in TAP loans.
The authority concluded that the new shareholding split "is not likely to create significant barriers to effective competition in the relevant markets identified."
The decision allows the process to go ahead between the State and the consortium set up by Humberto Pedrosa and David Neeleman for TAP to be 50% owned by the State and 50% by Gateway - if it buys out the full 5% offered to TAP employees.
It is not over yet as the National Civil Aviation Authority now needs to validate this new shareholding agreement after looking closely at the balance of power within the TAP board.
The previous government’s plan would have to be rejected as it contravened EU regulations limiting the participation of non-European capital to 49%.
The regulator looks not only at shareholdings but at decision making and the boardroom configuration.
Neeleman and Pedrosa now are represented on the board with six seats, the State has six seats and a chairman appointed by the State has the casting vote in the event of a tie.
Gateway will manage TAP with the State's power to intervene limited to certain eventualities.
Everyone seems happy at this outcome despite Gateway having paid just €20 million for its original shareholding in the once proud and profitable State-owned airline.
