After aid and investment from China and India, Sri Lanka is now turning to Singapore’s biggest investment arm, Temesek Holdings, to bail out state entities like SriLankan Airlines and the Ceylon Electricity Board (CEB), through equity investments, official sources said.
They said a team including External Affairs Minister G.L. Peiris, Deputy Finance Minister Sarath Amunugama and most likely, Treasury Secretary P.B. Jayasundera is due to fly to Singapore later next week for discussions with Temesek, one of Asia’s biggest investment firms, set up by former Prime Minister Lee Kuan Yew as a government-funded agency but run independently.
Various options have been looked at the running, maintaining and funding of SriLankan Airlines after it ended its long relationship with Emirates and bought back a 44% stake held by Emirates for $53 million, taking full control of the airline. While the airline has been making operational profits, its debt burden has risen even so, after the Emirates stake buyout through a consortium of banks led by Bank of Ceylon which holds the shares on behalf of the government.
Finance Ministry sources said there had been suggestions to seek foreign expertise and consultancy services to maintain the airline and other institutions with potential Temesek involvement as a serious funding option. There were suggestions at one point to look at Singapore Airlines as an investment and management partner, the sources said.
With the government strapped for cash, particularly to sustain huge loss-making entities like the CEB, equity investment in SriLankan Airlines is being considered with the airline now rolling out a new financial and strategic restructuring under a new business plan prepared by a team from the airline and the Treasury. SriLankan Airlines CEO Manoj Gunawardene unavailable for comment this week on the Temesek plan, told the Sunday Times last month that the airline business plan also saw stakeholders like hotels and travel operators being consulted to look at long term needs.
The plan including re-fleeting and expanding the airline by 2015 with the infusion of new equity which the government has to decide whether it would come from the Treasury or outside, Mr Goonawardene said at that time.
Temesek, which has a diversified Singapore $186 billion portfolio, owns and manages assets across Singapore and Asia. Its chairman is S. Dhanabalan, a former Singapore Foreign Minister during the Lee years while the latter’s daughter-in-law Ho Ching is an Executive Director and its former CEO. |
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