The deadline to extend the sale of Efacec to DST expired on Tuesday, at which point the government already knew that the group from Braga could not continue. But, Expresso learned, with the vote on the state budget scheduled for this Thursday, he preferred to keep the decision on hold so as not to disrupt the debate by privatization, which continues to fail. However, Eco emerged early in the afternoon that the sale had failed.
Neither the Treasury Department nor Parpública has so far wanted to comment on the news or provide confirmation. Since Monday, Expresso has urgently questioned the finance department about the company’s status, without any success.
Restrictions imposed by Brussels, which considered the company’s set-up constituted state aid, and conditions imposed by DST, ultimately did not allow the transaction to go through.
The government had known for a few days that the deal would not go through, Expresso said. The past few days have been full of meetings at the highest level in the government, namely in Finance and Economics, to come up with a solution that would not let Efacec, with negative equity, break.
The Executive, who nationalized Isabel dos Santos’ participation in mid-2020, is already working on solutions that will allow the survival of the company, known for its electrical transformers and electric mobility projects. The company will be restructured, in ways that are still under discussion.
It did not come, as Expresso knows, to have a notification to Brussels. There was a pre-notification of the sale of Efacec to DST in May, but the Directorate-General for European Competition pulled the red card, saying the deal, as intended, constituted state aid. A creative solution would have to be found for the operation to go ahead.
The company has been a money-guzzler. In May, and already after the deal with DST was closed, Efacec received 50 million euros from Parpública, an injection agreed as part of the sales process, as Expresso has already advanced. Money added to state-guaranteed loans of 115 million euros.
Economy at work on a solution
This Thursday, the Minister of the Economy and the Sea, António Costa Silva, spoke in parliament on the matter and said the government is working on a solution for Efacec. And that a public position would be announced “soon”.
“The government is gathering all the elements and we will take a public position shortly,” the minister said in response to Social Democratic deputy Afonso Oliveira.
António Costa Silva then stressed that it was “fundamental” to find a “solution for the company” and underlined that “we are approaching a decision phase”.
“My message is one of rest and work, which we are doing together with the Ministry of Finance to find a solution,” he emphasized.
Accounts in Accelerated Deterioration and Technical Bankruptcy
In July, António Costa Silva said in an interview with “Jornal de Negócios” that the risk that Efacec would give up the company and that the company would return to the state was “small”. Keeping the company in the orbit of the state is what the workers have been asking for.
José Teixeira, who agreed to buy Efacec on March 25, had told Expresso that the problems, if any, were not on DST’s side. “As far as it depends on us, with strict adherence to all technical, legal, ethical and moral rules, the transaction will be carried out,” said the businessman.
Time was the worst enemy of a deal that the government and former economy minister, Pedro Siza Vieira, hoped to close by the end of 2020, six months after the nationalization of Isabel dos Santos’ position.
Its accounts have gotten worse from year to year and many of its top staff – one of the company’s assets – have left to compete or create companies that compete with Efacec. Meeting contracts has been difficult, a situation that has been exacerbated by the pandemic and the disruption of the logistics chain.
In 2021, the company had a consolidated loss of 183.9 million euros, a negative EBITDA (earnings before interest, taxes, depreciation and amortization) of 40 million euros and a net debt of 193 million euros. In the first half year, according to “Eco”, Efacec had a consolidated loss of 55 million euros, an increase compared to the same loss of 15 million euros.
There were many potential candidates to buy Efacec – there were even talk of three dozen – but the size of the debt meant that only two – Sodecia and DST – showed interest, leaving only one candidate in the final stretch, the group. from Braga. With synergies and the strong growth of electric mobility, DST believed that Efacec would add value. A wish of José Teixeira that was ultimately not fulfilled.