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LISBON, May 21 (Reuters) - The Portuguese government on Thursday picked bids by two Brazil-based aviation tycoons for the next phase of privatisation of the indebted flag carrier TAP, discarding the only offer by a local competitor.
Transport Secretary Sergio Monteiro said the government will directly negotiate with two consortia - Gateway, comprised by a holding company of American-Brazilian investor David Neeleman and Portuguese bus company owner Humberto Pedrosa, and SAGEF, led by Brazilian-Colombian investor German Efromovich.
Neeleman is the founder of U.S. airline JetBlue and the CEO of Azul Brazilian Airlines.
Efromovich, who controls Latin America's Avianca via his holding Synergy, had made the only bid for TAP in the previous failed attempt to sell it in 2012. His offer was at the time rejected because of a problem with financial guarantees.
A third bidder, a holding company of Portuguese investor and aristocrat Miguel Pais de Amaral, has been excluded from the process because the bid he had presented was not considered binding, Monteiro told a news briefing.
The government set no deadline for the end of the negotiating phase, but it has said that it wants to sell the 61 percent controlling stake in TAP by the end of June.
TAP operates a fleet of 77 planes with 2,500 weekly flights, many of them to Brazil, with which Portugal has historic ties.
"We finally have a competitive environment in the TAP privatisation process ... even though the company is facing many difficulties," Monteiro said.
Because of European Union state-aid rules, the government cannot inject capital into TAP, which has debts of over 1 billion euros. It does not expect much revenue from the sale, but hopes that investors will rid the state of the debt.
TAP was hit by a 10-day pilots' strike earlier this month. After an earlier strike threat at Christmas, the government guaranteed future buyers would be barred from laying off workers en masse as long as the state remained a shareholder. The state is retaining a 34 percent stake that can be sold in two years. (Reporting by Andrei Khalip; Editing by Shrikesh Laxmidas)