After November 1 last year, the Minister of Economy and the Sea, together with the Secretary of State for Finance, João Nuno Mendes, presented the main points of the sale agreement of Efacec to the German investment fund Mutares, which was classified as “happy” for the national economy yesterday during the hearing in the Budget and Finance Committee, it was not guaranteed that it would be possible to recover the full amount invested in the company.

“The value created and recovered by Efacec will be shared two-thirds with the Portuguese state and one-third with Mutares. Does this mean that we will get back all the investments? I won’t say, but we can get some of it back,” said António Costa Silva in the Parliament of the Republic, after being questioned by PSD deputy Jorge Salgueiro Mendes, about the impact that the privatization of the company would have on the public accounts, which would not be clear in the 2024 state budget proposal.

The minister referred to the “cascade mechanism”, which allows value sharing, which could guarantee that part of the investment returns to the public treasury, although the contract is not a “term deposit”, but a mechanism subject to the ability to reclaim. value of the company”. Despite the explanations he gave, he emphasized that he is “deeply” convinced that the amount invested in Efacec will be recouped and that the company will reach “a stable situation”.

Yet the banks’ criticism did not stop: the PSD stated that “even to privatize, the state had to pay to leave Efacec”.

After it was announced that, in addition to the 202.9 million euros (or approximately 10 million euros per month) injected into the company since April 2022, a further 156 million euros would be invested to guarantee the sale to Mutares, the social democrats moreover: that the state shareholder was “treated the worst” in the entire operation and “with losses of hundreds of millions of euros”, allowing the German fund to buy a century-old company for 15 million euros, which “easily recovers in three years, with a management fee of five million agreed with the government.”

Regarding the possibility of Mutares receiving five million euros for the management of Efacec, the minister guaranteed that the contract does not include commissions of this nature.

In parliament, Costa Silva also said that investments averaging 10 million euros per month were “necessary” to keep “one of the great emblems of the Portuguese economy” running and reiterated that the investment is “guaranteed by tests of market operators”.

According to the minister, the fact that the company remained in operation is synonymous with ‘value creation’, as it generated 100 million euros in contributions for the State and that in the years in which the State intervened, it sold for around 445 million euros. euros, in terms of products”.

However, such statements were not considered sufficiently illuminating by the PSD, with the party accusing the minister of summarizing the state’s exposure at “just over a hundred million”, while an audit commissioned by the buyer shows that the exposure of the state in the entire process will amount to “more than 550 million euros”. António Costa Silva said he did not have “those numbers”.

A bankruptcy could cost 65 million euros annually

To explain to the Assembly of the Republic why the State could not drop Efacec, the Minister used the calculations made by the government to understand the costs associated with the loss of the company: if Efacec were to go bankrupt , it would cost the State between 60 to 65 million euros per year, between paid unemployment benefits and lost social security contributions.

Costa Silva explained that in a situation of bankruptcy it would be necessary to pay between 1.7 million and two million euros in unemployment benefits monthly, “about 20 to 25 million per year”, but these would also no longer be included in unemployment benefits. the state estimates 3.3 million euros per month, which amounts to about 40 million euros per year.

“Efacec has 2,800 suppliers, who, in the years in which the state intervened, have sold approximately 445 million euros of products and feed a very strong ecosystem,” he pointed out, emphasizing the company’s importance in the national business system and, above all in the North region.

Given the scenario he outlined, what had to happen, according to the minister, was ‘the restructuring of the company’, which was done through the reduction of the share capital to zero in a harmonious operation, with the State and Mutares then ‘taking the initiative’. its proportions”.

The person responsible for monitoring the economy recalled that the previous shareholders lost “305 million euros” and that banks and bondholders lost about 34 million euros, and that the financing mechanisms that allow Efacec to continue functioning now cost almost 94 million euros amounts, in addition to the 15 million euros invested by Mutares and another 60 million euros in guarantees – “private operators had a financial commitment of approximately 204 million euros, which is comparable to the 156 [milhões] which the state will introduce,” he declared.