Portugal’s Parliamentary Committee Approves Hearing of Economy Minister on Efacec Reprivatization

Portugal’s Parliamentary Committee Approves Hearing of Economy Minister on Efacec Reprivatization

The Economic Affairs, Public Works, Planning, and Housing Committee has greenlighted the hearing of the Minister of Economy and Sea, António Costa Silva. This move is aimed at shedding light on the ongoing reprivatization process of Efacec, a Portuguese multinational dealing with energy, mobility, and environment. The committee seeks to understand the reasons behind the constant delays that have plagued this process and the potential financial impact on taxpayers.

Originally, the privatization process was slated to be wrapped up by the end of July. However, as of September, no updates have been given, creating a cloud of uncertainty around the process. In a recent development, the general assembly of Efacec’s bondholders, which was initially scheduled earlier, has now been postponed to October 12.

A New Proposal: Reduced Losses for Bondholders

A new proposal on the table suggests that bondholders will lose 10% of their investment, a significant reduction from the previously projected 50% loss. This proposal is part of the company’s sale to the German fund, Mutares. This operation is crucial for the government’s aim to sell 71.73% of Efacec’s capital to the German fund. Under this new proposal, the bondholders will lose only 5.8 million euros, which is part of the efforts to save the company that was nationalized in 2020.

Conditions and Expectations

It is important to note that the ‘haircut’ is only valid upon the completion of the sale to Mutares, which is expected by November 30. Back in June, the government approved Mutares’ proposal for Efacec’s privatization. However, the amounts involved in this deal have been kept under wraps. The state has injected a significant amount of 132 million euros into Efacec, in addition to an additional 85 million euros in guarantees. The reprivatization process of the state’s majority stake of 71.73% in Efacec was approved in November last year.

While the reprivatization process of Efacec has been marred by delays and uncertainties, there appears to be a focused effort to ensure that the company remains viable and that the costs for taxpayers are minimized. With the rescheduled bondholders’ general assembly and the potential reduction in losses for bondholders, the coming weeks will be crucial in determining the future of Efacec.