Portugal's president blocks TAP privatisation over transparency concerns

FILE PHOTO: TAP planes are seen at Lisbon's airport

By Sergio Goncalves

LISBON (Reuters) - Portugal's president on Friday blocked a government decree that kicked off the privatisation of airline TAP, citing poor transparency and doubts about the future role of the state, and demanded urgent clarifications so as not to delay the process.

President Marcelo Rebelo de Sousa said that TAP was bailed-out by taxpayers and has a strategic value for the country, so there must be "maximum transparency in the entire process".

The government approved the sale of at least 51% of TAP a month ago and said it was committed to finding a partner airline that would boost its growth, Lisbon's hub and others airports.

TAP's privatisation has already attracted interest from Lufthansa, Air France-KLM and British Airways owner IAG.

Rebelo de Sousa said in a statement that the decree "raised multiple doubts" and he was returning it to the government, adding that his doubts "can be clarified without too much delay, without compromising the urgency of the process".

Prime Minister Antonio Costa said in a statement the concerns and that they would be "duly considered".

Rebelo de Sousa said he wants clarification on "the state's future effective monitoring and intervention capacity as the diploma doesn't expressly foresee or allow, in subsequent administrative decisions, any role for the state".

The president criticised the fact that the diploma allows TAP to "sell or acquire, even before the decision to sell, any type of asset, without the slightest precision or criteria", adding that "full transparency is not guaranteed".

TAP reported on Tuesday a 62% jump in third-quarter net profit to a record 180.5 million euros ($191 million).

($1 = 0.9463 euros)

(Reporting by Sergio Goncalves; Editing by Alexander Smith)