TAP is reducing share capital to cover losses and the government is injecting 980 million in increments

TAP reduced the share capital from EUR 904.3 million to zero to cover losses, and increased the share capital to EUR 980 million, with a phased injection of government financial support provided for in the company’s restructuring plan.

In information sent to the Securities Market Commission (CMVM), TAP informs that these decisions come after the approval by the European Commission, last December, of the restructuring plan of the TAP Group and the granting of restructuring aid.

As part of this restructuring, it is planned to grant a tranche of this aid by the end of the 2022 financial year.

For example, TAP reports that it has been decided to reduce the share capital from 904.3 million euros to zero euros, “to cover partial losses”, soon followed by an increase of the share capital from zero euros to 980 million euros, fully endorsed by the Republic Portugal, through the Directorate General of Finance and Finance.

This capital increase will be realized through three new cash flows: 294 million euros now, 343 million euros on 20 December 2023 and another 343 million euros on 20 December 2024.

“To accommodate these changes in the share capital, it was also decided to amend Article 4(1) of the Articles of Association”explains the airline.

As a result of these operations – adds the note to the CMVM – TAP’s share capital now amounts to 980 million euros, represented by 196 million shares, with a nominal unit value of five euros, of which 294 millions have been paid up.

“Thanks to these operations, TAP maintains the Portuguese Republic as the sole direct shareholder and beneficial owner, through the Directorate General of Finance and Finance,” the company says, emphasizing that “these operations translate into a strengthening of TAP’s capital structure”. .

The inclusion of this 980 million in TAP was foreseen in the state budget and completes the pie of 3.2 billion euros agreed with Brussels for the recapitalization of the airline. According to Community rules, TAP may no longer receive state aid for the next 10 years.