LISBON (Reuters) - Portugal hopes to name a buyer for its CTT postal service by the end of 2013 after being approached by potential bidders from Europe and across the Atlantic, a senior official said.
Sergio Monteiro, state secretary for infrastructure, transport and communications, also said he was optimistic the indebted state will sell concessions to operate several public transport firms like the Lisbon and Porto Metros next year.
The plans are part of a privatisation drive agreed under the terms of Lisbon’s mid-2011 EU/IMF bailout. The drive has been successful so far with Portugal overshooting its privatisation revenue goals by about a billion euros after pocketing more than 6.4 billion euros (£5.47 billion) in three separate sales.
“We believe there will be a competitive bidding environment, that would make the CTT privatisation a success,” Monteiro said of the postal services company whose origins date back to 1520. He said the government has already reduced costs and improved CTT pre-tax earnings to boost its attractiveness.
“We’ve been approached by interested players from the European and American continents,” he said in an interview, adding though that it was too early to say if the interest will transform into binding bids, while the final model for the privatisation was yet to be defined, most likely in October.
A number of domestic operators have also expressed interest, but only in parts of CTT like its express delivery service, and it was possible a separate sale of a unit or two could occur via a share offering after the main direct sale to an investor.
“What we want is to have the decision on the winner in the direct sale, that could include all the capital or not, before the end of the year ... There could be one cornerstone investor combined with a capital dispersion.”
He said CTT was studying the possibility of obtaining a postal banking licence for its network of 700 offices, “and if it decides that there is an advantage in having such a license, we will seize its value in the privatisation.”
Monteiro said the concession offerings for Carris, the Lisbon Metro, the Transtejo ferry, Porto’s STCP bus and tram company and the Porto Metro will kick off in the fourth quarter and should end in sales in 2014. “There is sufficient interest. We are very optimistic about this process,” he said.
Portugal’s public transport sector is saddled with 18 billion euros of debt, which Monteiro admits is unsustainable, and the concessions sale should at least alleviate the problem.
Monteiro said it was still uncertain whether the government will reopen this year the privatisation process of flag carrier TAP, which flopped at the end of 2012 when the sole bid was rejected due to a lack of financial guarantees.
“We will only feel comfortable to propose the reopening if there is a reasonable level of certainty that there will be more than just one interested party looking at TAP privatisations.”
But he said the government was interested in the swiftest possible solution for TAP because it had no money to capitalise it, while the airline needs to grow its fleet to take advantage of growing traffic and new routes to the Middle and Far East.
He said the new markets in Asia opened to Portugal thanks to the previous privatisations of energy firms EDP (EDP.LS) and REN (RENE.LS), in which companies from China and Oman bought stakes, pledging broader cooperation with Portugal. ($1 = 0.7493 euros)
Writing By Andrei Khalip, editing by Axel Bugge, Ron Askew