Portugal agrees in principle to take controlling stake in TAP airline, sources say

One of the sources said the negotiations had accelerated in the early hours of Thursday, leading to a draft agreement under which Brazilian-American aviation entrepreneur David Neeleman would cease being a TAP shareholder, while Portuguese entrepreneur Humberto Pedrosa would stay on. Neeleman and Pedrosa are the two partners in the Atlantic Gateway consortium that has a 45% stake in the airline and has until now resisted government plans to grant TAP a 1.2 billion euro rescue loan that would entail more government control.

Portugal's government and private shareholders in ailing flag carrier TAP are close to sealing a deal that would give the state a controlling stake while avoiding a full-scale nationalization, two sources with knowledge of the talks said.

The state now holds a 50% stake in TAP. One of the sources said the negotiations had accelerated in the early hours of Thursday, leading to a draft agreement under which Brazilian-American aviation entrepreneur David Neeleman would cease being a TAP shareholder, while Portuguese entrepreneur Humberto Pedrosa would stay on.

Neeleman and Pedrosa are the two partners in the Atlantic Gateway consortium that has a 45% stake in the airline and has until now resisted government plans to grant TAP a 1.2 billion euro rescue loan that would entail more government control. A second source said the agreement is almost sealed, only missing a few details, namely regarding the exact increase of the state's ownership and the final stake for Pedrosa.

The Infrastructure Ministry declined to comment.