Colombo (04/09 – 41.67) Sri Lanka’s government is looking to sell a 49 percent stake each of the state-run SriLankan Airlines’ catering and ground-handling units in efforts to restructure the national carrier, Aviation Minister Nimal Siripala de Silva said.
Speaking to reporters in Colombo on Monday August 29, the minister said the revenue from the sale of SriLankan Catering can be used to pay off debt amounting to 80 million dollars that was obtained by mortgaging its shares, as well as some other loans.
“SriLankan Catering now earns some profits, so we will hand over 49 percent of the company and its administration or if an investor requests more, we can give more shares according to the amount being sought by investors and raise some funds,” the minister said.
“With this, some of the debt burden of SriLankan Airlines will be reduced to an extent,” said de Silva.
With SriLankan Airlines Ground Handling, which generates an annual income of some five billion rupees, the minister said, the government expects a substantial return for a sale of a 49-percent stake of a separate company that will be formed.
“Nobody will come just for 49 percent shares. Management must be handed over too. For that too, we plan to call for expressions of interest,” he said.
Minister de Silva said that without retaining a 51-percent stake, Sri Lanka might lose ownership of the companies to be sold.
“So we can only give 49 percent. But if the investors are Sri Lankan nationals, we can go for more. There are many rich people in Sri Lanka, they can come together as a syndicate or with airlines and offer a bid,” he said.
Sri Lanka President Ranil Wickremesinghe has called for much needed reforms for the loss-making national carrier.
The airline has racked up losses of 372 billion rupees since management control was taken from Emirates in 2009.
According to Colombo-based think tank Advocata, SriLankanAirlines has, on numerous occasions, required treasury guaranteed loans to stay afloat, and has amassed over Rs. 53.6 billion in guarantees as of August 2021.