After many months of disturbances in the receipt of wages, Groundforce workers carried out, on the weekend of 17 and 18 July, a large-scale strike, forcing the Government and TAP to intervene.
The airline, for its part, opted to proceed with the direct payment of vacation pay and arrears to Groundforce workers after previously its proposal to the company for ‘dealing with’ had been refused.
TAP then went ahead with the purchase of equipment from SPdH/Groundforce for 7.5 million euros, to unlock the payment of wages and taxes in arrears, and the ‘dealing with’ company started to pay the airline for the rental of this material.
But the situation continued to drag on, with constant problems in the payment of salaries.
Advances from TAP to Groundforce for the payment of salaries
In the final of December 2020, in an audition at the Committee on Economy, Innovation, Public Works and Housing, João Alves, from the Groundforce Workers Committee, warned that the company’s salaries have been paid “due to the payment of services rendered to the TAP”.
According to João Alves, in December TAP was already paying for services that had not yet been provided and the payment of the Christmas subsidy until December 15th and taxes on the 20th was actually involved.
On February 25, the workers were informed, through a letter sent by Alfredo Casimiro, that the company is not in a position to pay their February wages until the bank loan process with State guarantee has been completed.
In the letter, Alfredo Casimiro reports having been informed by TAP’s Board of Directors that it will not be possible to continue advancing money to Groundforce.
On March 18, it was reported that TAP would buy SPdH/Groundforce equipment for 7.5 million euros, to unlock the payment of wages and taxes in arrears, and the ‘dealing with’ company would pay the airline for the rental of these materials.
However, on April 28, Groundforce’s Board of Directors decided to proceed with the annulment of the agreement with TAP, alleging that it was jeopardizing its survival and that of the 2,400 workers.
“The meeting of Groundforce’s Board of Directors ended a moment ago, in which, in view of the opinion of the Supervisory Board, the auditors of Deloitte and some jurists, it was concluded that the ‘sale & leaseback’ and leasing contracts, entered into on 19th March 2021 between Groundforce and TAP”, according to a statement sent by the Chairman of the Board of Directors (PCA) of Groundforce and Executive Chairman (CEO), Alfredo Casimiro.
TAP rejected this cancellation and warned that the payment obligations remained.
Groundforce even tried to raise a surplus of three million euros from the company’s pension fund to pay vacation allowances in the final of June, but did not reach an agreement with the workers to that effect.
On July 12, taking into account the continuing problems in the payment of salaries, TAP said it was available to ensure, as an advance, the payment of the holiday allowance for Groundforce workers, having made a proposal in this regard to the company of ‘dealing with’, announced the airline.
However, on July 14, Groundforce considered “unacceptable” the conditions of the advance suggested by TAP, for the payment of the vacation allowance, and appealed to the airline to pay for the services already provided.
“SPdH [Groundforce] responded in a letter written with the authority of someone who, in the last two months, has adopted a constructive posture, with the reservation that the ongoing sales process requires and without contributing to the media noise, which has so harmed the company and its workers. And he replied, explaining that the terms and conditions on which the advance proposed by TAP is based are unacceptable”, informed the airport assistance services company (‘dealing with’), in a statement.
In order to resolve the deadlock, TAP decided to pay Groundforce workers directly the amount corresponding to the holiday subsidy and overdue annuities, as announced on July 21 by the Ministry of Infrastructure and Housing.
“This was the solution found to overcome the refusal” of the “Groundforce administration to accept the transfer of TAP, which would allow the payment to workers of the allowance due to them”, the Government said.
At the same time, the airline put forward “the contractually defined payment to settle the bill for services provided in June, ensuring that Groundforce’s management has sufficient liquidity to fully and timely pay workers’ salaries for the month of July,” the ministry said. , stressing “that the value of the services provided paid by TAP to Groundforce is greater than the salary needs of the workers” of the company. Groundforce later confirmed that timely payment of salaries was assured.
Government vs Groundforce
It was the Transport Workers Union of Portugal (STTAMP) that revealed, on March 1st, that Pasogal will not have accepted a proposal to unlock funds for the payment of workers’ salaries, in a ‘saga’ that would involve the Government, TAP and Groundforce.
The following day, TAP announces that it has proposed to make an advance payment of 2.05 million euros to Groundforce for the payment of salaries and debts to suppliers, demanding in exchange a pledge of Pasogal’s participation.
However, Groundforce’s management refuses to guarantee the advances requested from TAP the pledge of Pasogal’s 50.1% stake in the company, counter-proposing to present as a guarantee “assets that account for the totality of its debts”.
In a statement, the president of Groundforce says that the response he received from the government to his proposal to make the company viable is “insultous”, constituting a “blackmail and an unacceptable ultimatum”.
On the same day, March 4, Pedro Nuno Santos calls a press conference at night, at his ministry, and tells journalists that “TAP cannot continue to make advance payments without guarantees” and considers the shareholder’s proposal “unacceptable”. private to demand to maintain control of the company in the event of the execution of the pledge of its participation for non-compliance.
The Minister of Infrastructure also said, on the same occasion, that the Government has no intention of nationalizing Groundforce.
The following day, March 5th, the plot thickens: Alfredo Casimiro informs the media that he accepted all the demands presented by the Government at the press conference, but the executive denies and says that the majority shareholder did not accept and that he added new ones conditions, which would be being analysed. Pasogal insists that it accepted and that it is waiting for a contact from the Government.
On March 8, an official source at the Ministry of Infrastructure and Housing told Lusa that the negotiations, which had been dragging on for several days, had failed, because the owner of Pasogal cannot deliver the shares as collateral for the loan, since are already pledged.
The Ministry of Infrastructure also informed, on March 10, that Pedro Nuno Santos will present a felony participation against Alfredo Casimiro, due to the release of a recording of a conversation between the two.
Four days later, the TAP group proposes to make available to Groundforce 6.97 million euros, through a capital increase and not an advance, as was being negotiated, to unlock the deadlock and avoid an “imminent rupture scenario” of the company.
Pasogal said, on March 16, that it is available to consider an increase in SPdH’s share capital, reserved for shareholders.
On March 18, Alfredo Casimiro accused the Government of being to blame for the company’s situation, due to the lack of support to face the effects of the pandemic.
“I’m not the culprit, it’s not the private management. It’s the pandemic and the lack of support promised by the State,” said Alfredo Casimiro, before the deputies of the parliamentary committee on Economy, Innovation, Public Works and Housing.
After that, Pedro Nuno Santos accused Groundforce’s Chairman of the Board of Directors, Alfredo Casimiro, of having deceived the Portuguese State and the company’s workers of ‘dealing with’, for not having informed them beforehand that he had committed the actions.
“We are talking about a businessman who, in his relationship with the State, was deceiving the State until the end and who, at a certain point, afterwards, is still recording a meeting with a minister,” stated Pedro Nuno Santos.
Insolvency requested by TAP in May
The Judicial Court of the District of Lisbon ruled this Wednesday (4) the insolvency of SPdH (Groundforce), announced TAP, which had made a request in this regard, on May 10, according to a statement.
“The declaration of insolvency of SPdH – Serviços Portugueses de Handling, SA (Groundforce), issued today by the Lisbon Commercial Courts of the Judicial Court of the District of Lisbon, is, for TAP, the transitional solution that best allows to restore confidence in the Groundforce management,” said the company, in the same note.
“The company emphasizes that this Court decision does not, in itself, determine the automatic termination of employment contracts of SPdH workers or the suspension of contracts for the permanent provision of services by Groundforce, including ground handling services to TAP “, assured.
“This decision results from the request made on May 10, by TAP, SA, as creditor, with the aim of seeking to safeguard the viability and sustainability of the ‘handling’ company, ensuring its operational activity at Portuguese airports”, mentioned the airline.
In another note, published by the Portuguese Securities Market Commission (CMVM), TAP says that, “if this proves to be feasible, the possibility of continuing the activity of SPdH can be assessed in the context of the insolvency process, with creditors may decide to approve a recovery plan for this company.”
“Without prejudice to the possibility of challenging the sentence under the terms provided for in the law, the proper processing of the insolvency process will follow”, indicated the carrier.
On May 10, the airline highlighted the “dealing with” company’s “worsening financial situation”, the “lack of credible solutions for the possibility of obtaining financing (in particular, given the refusal of financing and provision guarantee by Caixa Geral de Depósitos and Banco Português de Fomento)”, the “recent unilateral (and illegal) decision by Groundforce to consider the contracts signed on March 19, 2021 with TAP as invalid and ineffective, in compliance with its non-compliance due to non-payment of the rental of equipment sold to TAP” and the “lack of conditions that, from TAP’s perspective, the majority shareholder of Groundforce has to re-establish the confidence of its creditors”.
On May 18, Groundforce considered that the insolvency request presented by TAP leaves the company in “total strangulation” and could lead to its operational disruption, ending the efforts that have been made to save it.
“With the insolvency petition, all the efforts we have made to save the company fall to the ground. […] At the precise moment when activity is resumed, it can lead to the company’s operational disruption, by drastically affecting the relationship with its customers. customers, but, above all, with their suppliers, who, in view of this decision, are considering suspending supplies, if there are no advance or cash payments”, said the chairman of the Board of Directors (CA) of SPdH/Groundforce, Alfredo Casimiro, in a statement.
Strikes paralyze operations at airports
With the payment of salaries continuing to take place irregularly, several unions decided to go ahead with a full-scale strike over the weekend of 17 and 18 July, which canceled hundreds of flights at all national airports.
At issue were stoppages called by the unions of Airport Handling Technicians (STHA), Metallurgical and Related Industries (SIMA) and Economists (SE), Transport Workers of Portugal (STTAMP), Airport Maintenance and Aviation Workers ( STAMA) and the Aviation and Airport Workers (Sitava), the National Civil Aviation Workers (SINTAC) and the Commercial Aviation Boards (SQAC) and which would be repeated in the final of July and early August, but were eventually withdrawn accordingly. that the payments of salaries and allowances were being assured or made. STTAMP did, however, keep a warning for the second half of August.
Right now, there are two solutions to stabilize Groundforce once and for all. The first, preferred by the Government, involves the sale of shares that Pasogal holds in Groundforce and which are currently held by Montepio bank, due to the pledge.
Even so, the Government is prepared to move “immediately with the necessary actions to guarantee the essential shareholder change for the viability of Groundforce”, in case the sale of the shares held by Montepio does not materialize.
In a statement, the Ministry of Infrastructure and Housing said, on July 21, that the Government “has the expectation that the sale by Montepio of the shares of Pasogal, which it has in its rightful possession, will have a positive outcome in the coming days” .
“However, if this sale does not take place very soon, the Government will immediately proceed with the necessary actions to guarantee the essential shareholder change for the viability of the company,” he added, without giving any further details.
In the same note, the tutelage referred that “this change in the shareholder structure will also allow to comply with what is due to the workers, namely, in terms of career progression”.
The Government recalled that, “following the decision of the central civil court in Lisbon that declared the injunction filed by Pasogal to prevent Montepio from selling its stake in Groundforce, the Ministry of Infrastructure and Housing sees the conditions for a resolution in place. definition of the instability experienced in the company”.