Emirates, Etihad and Adani Group among bids for SriLankan Airlines stake
A SriLankan Airlines plane at the BIA.
Emirates, Etihad Airways and the Adani Group are among prospective bidders seeking a stake in SriLankan Airlines (SLA).
They are among 16 investors – Tata Sons (Air India) being a notable absentee – which have expressed interest in phase 1 of the process, top Aviation Ministry sources revealed.
The national carrier’s restructuring process phase 1 has ended with the closing of bids for the divestiture of the debt-ridden national carrier and the selection of prequalified bidders’ is now underway.
The privatisation of loss-making national carrier SLA is to be finalised by June 30, 2024.
A special team of experts in the aviation field is engaged in the evaluation of bids to select prequalified bidders and to shortlist them soon, the sources said.
An international consultant has been appointed to guide the restructuring process of SriLankan Airlines, they said.
The divestiture is planned to be completed through a two-stage competitive bidding process; RFQ (Request for Qualification) and RFP (Request for Proposals for the Proposed Transaction).
The phase one of the divestment process RFQ has been completed.
The Sri Lankan government is currently in the process of restructuring and/or removing SriLankan Airline’s debts or liabilities which are on the latest financial statements of the airlines.
According to the Finance Ministry’s latest fiscal management report SLA’s dues to the Ceylon Petroleum Corporation (CPC) amounting to Rs. 102.5 billion as at the end of April 2023 will be settled as per the strategy to restructure the balance sheet of a few SOEs.
SLA recorded improved financial performance in the first eight months of 2023 as reflected by profit before tax (PBT) of Rs. 79.8 billion.
The total revenue increased by 27.2 per cent to Rs. 238.9 billion in the first eight months of 2023 compared to Rs. 187.8 billion in the same period of 2022.
The total expenditure incurred in the first eight months of 2023 was Rs. 207.5 billion, an increase by 8 per cent from Rs. 192.2 billion in the same period of 2022 mainly due to the significant increase in airport, routes and passenger costs, the report revealed.
However, SLA carries a debt of US$ 1.2 billion to various organisations including local state banks, accumulated unpaid fuel bills, outstanding payments for international bonds and leased aircrafts, and an accumulated loss of Rs. 594.4 billion. If selected, it would be Emirates second foray in running the national carrier after it exited in 2008.
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