Efromovich claims TAP sale may be illegal

Two time loser Germán Efromovich, who last week failed in his bid for control of Portugal’s state airline TAP, is to demand access to all the documentation related to the winning proposal.

Efromovich, whose Synergy bid vehicle failed to secure the TAP shares on offer, wants to assess whether he has grounds to take action against the government in time to prevent the sale of TAP to David Neeleman’s Gateway partnership.

The Brazil-based owner of Azul airlines is prepared to go to court in Portugal and to appeal to the European Commission if he finds sufficient grounds for complaint.

Lawyers acting for Efromovich now are waiting for the publication of the resolution made last week by the Council of Ministers which approved the sale of a 61% stake in TAP to the Gateway partnership formed by David Neeleman (49.9%) and Humberto Pedrosa (51.1%).

When details of the decision and of the agreed deal are published, Efromovich’s lawyers will request full access to all documents relating to the decision.

The main concern of Efromovich is over possible non-compliance with EC rules that prevent non-European owned airlines to control airlines based in EC countries.

Efromovich will argue that David Neeleman, an American born in Brazil, has broken these ownership rules even though his partnership includes Portuguese national Humberto Pedrosa who conveniently owns 50.1% of Gateway.

The Government took legal advice from lawyers Freshfields over the question of ownership and control at Gateway and was happy that the 50.1% shareholding by Pedrosa was enough for the Council of Ministers to approve the Gateway bid.

Detractors say that Gateway was set up by Neeleman, Neeleman has a history of airline ownership and that really he is the one that is, and will be pulling the strings at TAP, even though he is not allowed to do so under EC rules.

Pedrosa hopped aboard the Gateway bid after the man he originally was backing, Pais do Amaral, started to lose interest before finally baulking at the deadline rules.

Pedrosa joined Gateway just six weeks before the bids had to be in and it looks to commentators and the public that it was Neeleman’s show all along and that Pedrosa was asked to join in as he is a Portuguese national and well known within government circles. By owning 50.1%, Pedrosa nominally controls Gateway but this clearly is not enough to allay fears in Brussels, fears that Efromovich will be fuelling.

Efromovich also wants to look at other areas of the successful Gateway bid and compare them to his own Avianca offering, primarily the question of TAP’s €1.2 billion debt and who now is responsible for it, Gateway or the Portuguese taxpayer?

The 2012 privatisation of TAP was pulled as Efromovivh, the only bidder, was said not to have offered bank guarantees.

Efromovich argued then that he had not been asked for any and anyway, the provision of bank guarantees was not one of the bidding criteria.

Germán Efromovich has been annoyed ever since but has bided his time with a high degree of constraint until the process re-started in 2015. Now he has lost again and may have little reason to hold back from offering his frank opinion while seeking to have the Gateway bid discredited and overturned.

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