--Board member Jose Efromovich says Synergy to present binding
offer
--Efromovich sees purchase as European entry point
--Efromovich brothers in process of obtaining EU passports
(Updates with details, beginning in the sixth paragraph.)
By Darcy Crowe
PANAMA CITY--Synergy Group Corp., a conglomerate that controls
Colombian carrier AviancaTaca, is figuring out the purchase price
it will present in a binding offer to take control of Portuguese
airline TAP before a Dec. 7 deadline, one of the group's board
members said Friday.
Jose Efromovich, a board member of Synergy and the brother of
Bolivian-born magnate German Efromovich, who is spearheading the
acquisition, said the group "is evaluating a figure that makes
sense and we have a deadline of Dec. 7" to present the offer.
"We have a group of 38 people studying this," Mr. Efromovich
said on the sidelines of an airline conference in Panama. The
Portuguese government said in October it had selected Synergy as
the sole bidder in the privatization of state-owned flagship
carrier TAP Air Portugal.
Mr. Efromovich said Synergy would present an offer but declined
to unveil the amount. "The main attraction for us in this purchase
is that it is an entry point into Europe," Mr. Efromovich said. "We
are going to present an offer that squares with our diligence work
and what we find."
Mr. Efromovich and his brother are the sons of Polish immigrants
who moved to Bolivia after World War II. Both are in the process of
obtaining Polish passports to comply with European Union rules that
prohibit non-European shareholders from controlling more than 49%
of EU carriers.
The purchase of TAP would represent their first move into the
European market after quickly building AviancaTaca into one of the
most powerful carriers in Latin America.
Jose Efromovich's brother, German, started Synergy in the
airline business when the group was offering oil services in Brazil
and started to fly oil companies' personnel to oil fields.
The company then spotted an opportunity as governments in the
region moved to open up the airline business, which had
traditionally been under poor management by the state or from
private firms.
They moved to buy a controlling stake in Avianca, which at the
time was under bankruptcy. Synergy then paid $63 million in cash
and assumed nearly $220 million in debt.
After stripping the company of inefficiencies, improving
customer service and buying new planes, the airline was quickly
turning a profit. Synergy then moved to merge Avianca with Taca,
the flagship airline of El Salvador that had a strong grip over the
Central American market.
The merged airline then sold an equity stake in the airline of
$250 million in shares listed on the Colombia stock exchange, an
offering that was five times oversubscribed.
It is unclear how TAP and AviancaTaca could operate jointly. Any
decisions on that are still years away, Mr. Efromovich said.
Instead, Synergy would focus on using TAP to build up its unit
in Brazil, which is called Avianca Brasil but is a separate entity
from AviancaTaca, Mr. Efromovich said.
The purchase of TAP is being closely watched by the airline
industry in Latin America.
Enrique Cueto, the head of Latam Airlines Group SA (LFL,
LAN.SN), said in a speech its rival's foray into Europe is "a big
jump...operating in Latin America is not the same as in
Europe."
Jose Efromovich, however, said the purchase was an easy way for
Synergy's operations in Brazil to expand. "We can't really grow
much more inside the Brazilian market and no one knows how to take
people back and forth between Brazil and Europe better than TAP,"
he said.
Write to Darcy Crowe at darcy.crowe@dowjones.com
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