Sri Lanka to attract foreign investor by offering a 49 percent stake of national carrier
The government of Sri Lanka is looking at attracting a foreign investor for the country’s national carrier, SriLankan Airlines, by offering a 49 percent stake and taking off some of the debt off the balance sheet of the airline.
A senior official of the Sri Lankan government has said the investors would have to invest at least US$ 250 million to modernise the airline.
Sri Lanka’s Public Private Partnership (PPP) Agency has reportedly prepared an information memorandum which can be offered to prospective investors.
Chairman of the PPP Agency, Thilan Wijesinghe has been quoted as saying that the information memorandum could be released after a cabinet appointed negotiations committee (CNAC) approves it and makes the required policy decisions.
Wijesinghe has reportedly told the parliamentary Committee on Public Enterprises (COPE) that talks are ongoing with the Department of External Resources to get US$ 500 to US$ 600 million re-financing facility from the Asia Infrastructure Investment Bank (AIIB) to take the debt out of the SriLankan Airlines balance sheet.
He has observed that no investor would come to the airline with its current level of debt, but added that the airline could however move forward with about US$ 200 million of debt.
The current SriLankan Airlinesboard is also implementing a re-structuring plan to reduce debt by another US$ 100 million.
A CANC chaired by Mahaweli Ministry Secretary Anura Dissanyake, a Deputy Treasury Secretary and three others have been appointed by the government of Sri Lanka.
A seven member project committee has also been appointed.
OSL take:
Sri Lanka’s national carrier, SriLankan Airlines, is a business/investment opportunity in the pipeline for foreign businesses/investors engaged in the global aviation business. A discerning investor could explore the opportunities of diversifying the existing business model and convert it to a viable business solution. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment and the many trade agreements as well as the trade concessions enjoyed by the country has made Sri Lanka an attractive business destination in the South Asian region. Also, the country’s positioning as a top tourist destination along with the move by the government of Sri Lanka to develop the country’s aviation industry would further expand the scope of business for the airline. Therefore, foreign businesses/investors should explore the business/investment opportunity involved in partnering with Sri Lanka’s national carrier.
| Article Code : | VBS/AT/22082019/Z_7 |