Govt. takes over Rs. 100 b worth UL debt; spares $ 175 m five year international bond

Wednesday, 13 March 2024 00:22 - - {{hitsCtrl.values.hits}}

The Government has taken over debt worth Rs. 100 billion of SriLankan Airlines sparing the $ 175 million five year international bond. The SOE Restructuring Unit (SRU) said yesterday that the Cabinet of Ministers by its decision dated 4 March 2024 approved the transfer of the following liabilities of SriLankan Airlines to the Government of Sri Lanka (GoSL):

1. $ 105 million of Treasury guaranteed debt due to Bank of Ceylon

2. $ 12.9 billion of Treasury guaranteed debt due to Bank of Ceylon

3. $ 105 million of Treasury guaranteed debt due to People’s Bank

4. Rs. 18.5 billion of Treasury guaranteed debt due to People’s Bank

SRU said consequent to the move (worth Rs. 100 billion), the only component of significant term borrowing that remains in the books of SriLankan Airlines relates to a $ 175 million, 7%, five year international bond issued in 2019.

This bond is also backed by a sovereign guarantee and is due for settlement in June 2024.

“The Cabinet of Ministers has also decided that in the event of a ruling in favour of Sri Lankan Airlines with respect to the arbitration case filed by it against Airbus SE, steps will be taken to transfer proceeds arising from the same to the GoSL,” the SRU added.

Last week Ports, Shipping and Aviation Minister Nimal Siripala de Silva the Government decided to take over $ 512 million of national carrier’s debt in a bid to make the national carrier more attractive to prospective investors. (https://www.ft.lk/front-page/Govt-absorbs-512-m-debt-to-dress-up-SriLankan-Airlines-for-sale/44-759202).

The Government last week announced that the deadline for Expressions of Interest for the national carrier was extended to 22 April. The previous deadline was 5 March.