Fitch Rating Sri Lanka this week noted that the absence of any ‘explicit shareholder arrangement’ between the Sri Lankan Government and Sri Lanka Telecom (SLT)'s 44.9% shareholder - Malaysia's Usaha Tegas – could ‘potentially dilute the Government’s influence over SLT's operations’.
Its comments came while upgrading Sri Lanka Telecom's (SLT) Long-Term Foreign Currency (LTFC) Issuer Default Rating (IDR) to 'BB-' from 'B+'. Usaha Tegas owns Malaysia’s Maxis mobile phone company, both of which are owned by Sri Lankan-origin Tamil businessman Ananda Krishnan.
According to a SLT board director, the shareholder agreement was not signed due to a Supreme Court ruling in a fundamental rights case filed by the late Sripathy Sooriyaratchchi, a one-time parliamentarian and minister of the ruling UPFA. However the court permitted SLT shares to sold to Usaha Tegas.
Fitch said SLT's Foreign- and Local-Currency IDRs are constrained by the respective sovereign IDRs, and any future change in the sovereign ratings will lead to a corresponding change in SLT's ratings.
“This is primarily due to the government of Sri Lanka owning, directly and indirectly, more than 51% of SLT,” it said. |
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