Portugal's Government is close to fulfilling the necessary conditions to re-launch the privatisation of state airline TAP, according to today’s Diário Económico.
According to reports the process can be re-started this month and there are signs that American businessman Frank Lorenzo is in the running as he already has ‘shown interest’ in buying TAP.
This time around there is likely to be more than one bidder to challenge Gérman Eframovich who was in the one horse race last time TAP was on the block in 2012.
Lorenzo already is being heralded in the Portuguese press as being 'the former president of Continental Airlines' and has employed JP Morgan to advise him through the bidding process which involves grappling with Portuguese contract documents and the required bank guarantees.
Francisco Anthony "Frank" Lorenzo is most famous for his leadership of Texas International Airlines and its successor, holding company Texas Air Corporation between 1972 and 1990, through which he formed or acquired a number of major U.S. airlines.
Lorenzo gained a reputation for union busting, stemming from his leadership during the 1983 bankruptcy of Continental Airlines that enabled the company to void its union contracts, and during the strike and bankruptcy of Eastern Airlines that eventually led to its permanent shutdown in 1991. Many at the time accused Lorenzo of selling off assets and transferring Eastern's aircrafts to Texas Air, other accusations included depleting Eastern Airline's pension fund.
Lorenzo’s history is contentious, both “despised by unions and admired by airline strategists.”
Since 1990, Lorenzo has been chairman of Savoy Capital, Inc., devoted to asset management, private investments and venture capital, as well as a number of philanthropic activities.
Jornal de Negócios reports that Qatar Airways and Eframovich’s Synergy Group Corp. from South America both are interested in entering into formal negotiations for the acquisition of TAP.
Since the end of 2012 the aviation market has changed and TAP has been producing steady returns thus increasing its market value.
Whether Lorenzo's style of buccaneering leader is right for TAP may be debated but Portugal's cash-poor government may well go for the highest offer, ‘in the public interest.’
