Prospective bidders for a stake in SriLankan Airlines (SLA) include Emirates, Etihad Airways, and the Adani Group.
They are among 16 investors, including Tata Sons (Air India), who have expressed interest in the first phase of the process, according to top Aviation Ministry sources.
The first phase of the national carrier’s restructuring process has concluded with the closing of bids for the debt-ridden national carrier’s divestiture, and the selection of prequalified bidders is now underway.
The privatisation of the loss-making national carrier SLA is scheduled to be completed by June 30, 2024.
According to the sources, a special team of aviation experts is evaluating bids in order to select prequalified bidders and shortlist them soon.
Sri Lankan Airlines’ restructuring process will be guided by an international consultant, 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 SriLankan 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 of 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 aircraft, 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.
Source: Sunday Times
