Sri lanka News – Sri Lanka is planning to cut a part of its debt by spinning of profitable units before trying to attract a buyer Aviation Minister Nimal Siripala has said.
SriLankan Airlines now had a sovereign guaranteed bond of 175 million US dollars, loans to the People’s Bank and Bank of Ceylon of 386 million US dollars, Ceylon Petroleum Corporation, Airport and Aviation Services and Civil Aviation Authority was owned 325 million US dollars, he said.
There were arrears of 80 million US dollars for aircraft lease paymnent.
The group had borrowed 80 million US dollars from the Bank of Ceylon by mortgaging shares of SriLankan catering, he said.
SriLankan had debt of 1,046 million US dollars, he said.
“This is about 411 billion rupees,” Minister de Silva said. “It is essential that the airline be res-structured.”
The government was planning to sell 49 percent of SriLankan Catering to an investor to raise funds to reduce the debt.
SriLankan Airlines is the top customer of SriLankan Catering.
SriLankan Airlines’ ground handling will be incorporated into a separate unit and 49 percent will be offered to an investor.
Ground handling bring about 5.0 billion rupees a year to the airline, Minister de Silva said.
Sri Lanka to sell 49-percent stake of national carrier’s catering, ground-handling units
President Ranil Wickremesinghe has said SriLankan Airlines would also be sold as it had large accumulated losses and debt.
Minister de Silva said to keep landing rights at some foreign airports 51 percent of the stock must be kept by Sri Lanka resident shareholders.
Sri Lanka could sell 49 percent of the airlines stock held by the government to foreign investors and if domestic investors involved a bigger share could not sold down he said. (Colombo/Aug30/2022)