Thursday Nov 21, 2024
Thursday Nov 21, 2024
Monday, 19 March 2018 01:51 - - {{hitsCtrl.values.hits}}
The Public Enterprise Development Ministry is on the lookout for an investment partner to manage national carrier SriLankan Airlines as its restructuring consultant is set to present a crucial report on 21 March.Denying reports that the Government had abandoned plans for a public-private partnership (PPP), Minister Lakshman Kiriella said that the search for an investor was still on.
The Government has been trying unsuccessfully to offload the debt-ridden national carrier for the last two years. A public tender process followed earlier failed to attract viable investors to carry the company forward.
Government lobbying with a number of other potential investors also did not take off as expected.
“The Government is looking for a suitable investor to take over 49% of the shares and responsibility of managing the company,” the Minister told the Daily FT. He said that the Government was keen to find an investor as it was not able to bear the Rs. 1 billion monthly loss currently incurred by the company.
“We are not going to sell off the company. If we sell it then we will lose the company so we are not going to do that but we will form a PPP. But they will not be given the management of the company,” he said.
A controlling stake of 51% will be retained by Government, he revealed.
“At present we are evaluating several options. The PPP unit set up within the Central Bank is heading it,” the Minister said.
The second part of the restructuring report by Nyras Consulting Company is due to be presented to the two committees on 21 March, a highly-placed source told the Daily FT.
British consultant Nyras Consulting Company, which specialises in the global aviation sector, was appointed to lead the restructuring of the carrier. The consultants, who have been tasked with restructuring and finding an investor for the airline, presented their first report to both the ministerial committee headed by Prime Minister Ranil Wickremesinghe and the officials committee headed by Finance Ministry Secretary Dr. R.H.S. Samaratunga in December last year.
The preliminary report by the consultants outlined a restructuring program under five broad areas - managing the right size and type of aircraft fleet, debt restructuring, tax concessions, network rationalising and fuel price - to restructure and improve its financial position. The consultants had expressed confidence in finding a suitable investor once the restructuring was complete.
Following the report, the Board of Directors of the airline offered their resignations from their posts, which was later accepted by the two committees. However, the Government is yet to appoint the interim board which is to see through the restructuring process.
