News
Super Group ahead in race for SriLankan
View(s):Company offers US$ 5 billion package for partnership
By Namini Wijedasa
Super Group Partners Company Ltd–a joint venture between Trans Maldivian Airways and the Singaporean ground-handling firm SATS–has scored highest among ten bidders vying for a management stake in cash-strapped SriLankan Airlines, an authoritative source told the Sunday Times.
Following at a close second is Peace Air, a company owned by businessman Gamini Wettasinghe. The proposals were evaluated by the National Savings Bank, the lead manager appointed by the Cabinet, assisted by the audit firm KPMG. The source said that Super Group, which wants an 80 percent stake in SriLankan, has scored 68 marks. Peace Air has sought a 70 percent stake and has scored 65.
The three mark difference is attributed to Mr Wettasinghe not securing verification for his credit line in time. Both parties have offered a total investment of US$ 5 billion in the country, spread out over ten years. A billion out of this will go towards covering SriLankan’s existing debts.
“That is their total package, not just into the airline,” said a source who had examined the document.
It is not immediately clear whether this pledge will be distributed among other projects the companies hope to secure in Sri Lanka.
The lead manager’s recommendations have been sent to the Cabinet Committee on Economic Management. One aspect the CCEM will have to look at is the size of the stake sought by the respective parties in SriLankan. To retain its national airline status, no foreign party can hold more than 45 percent of its shares, according to guidelines prescribed by the International Civil Aviation Organisation (ICAO).
Meanwhile, SriLankan is going ahead with its business plan amidst privatisation moves. The airline has terminated the leases on three new A350s. They were due for completion in October and November 2016, CEO Suren Ratwatte said. SriLankan had tough negotiations with the Dutch firm Aerocap for the termination of the leases.
“Termination of this sort of agreement is very rare,” he explained. “Usually, the lessors force the airline to take delivery. The terms included extension of one leased A330 aircraft, which we would have done anyway, and acquisition of another in 2017, which we need for our business plan.”