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--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 firstname.lastname@example.org
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