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Thursday, December 1, 2022

Govt. decides to sell 49% stake and administration in Sri Lankan Catering

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Aviation Minister Nimal Siripala de Silva says that proposals are to be called for from desiring investors to invest in 49% shares and administration of SriLankan Catering and also 49% shares and administration in SrLankan Airlines’ Ground Handling. 

The minister stated this at a press conference held today at the ministry regarding the restructuring of SriLankan Airlines, the country’s national carrier.

He stated that currently the SriLankan Catering is making profits to a certain extent and that therefore they have decided to sell 49% stake and administration of the SriLankan Catering, while keeping 51% stake with the government. 

He said if an investor is seeking a higher stake in the company, based on the relevant requests by the investors, the government is prepared to sell a higher percentage of the shares and obtains some funding from that.

“When we get that amount of money, we can use it to pay the 80 million dollars that we have mortgaged the shares of that company, and another amount of money and another loan.” 

“Then the debt burden of SriLankan Airlines will be somewhat reduced,” he said.

The minister also said that currently they are forming a separate company for ground handling and it will be provided the relevant duties and movable and immovable properties related to that company.

“From there we get an income of about Rs. 5,000 million per year. Therefore, we think that we will be able to get a lot of money in restructuring it,” de Silva said.

He said that they expect to be able to sell 49% stake in that company as well and that no investor will be willing to invest for only 49% shares and therefore, they will have to give them management of the company as well.  

Accordingly, he said the government intends to call for Expressions of Interest (EOIs) for this. 

The moneys received for both these, we don’t expect to use for any other work. It will be used to pay the debt of SriLankan Airlines and get rid of the debt as much as possible.”

During the briefing, the minister also revealed that the total debt of SriLankan Airlines is USD 1.126 billion which is equivalent to about Rs. 401 billion.

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