COLOMBO- Minister of Ports, Shipping, and Aviation, Nimal Siripala de Silva, confirmed that SriLankan Airlines (UL) will undergo restructuring instead of being sold.
He emphasized that, according to existing regulations, only up to 49% of the airline’s shares can be transferred to another entity, but no suitable investor has expressed interest so far.
SriLankan Airlines Not for Sale
During the press briefing “Collective Path to a Stable Country” at the Presidential Media Centre (PMC) on the 3rd, Minister Siripala de Silva elaborated on the restructuring plans.
President Ranil Wickremesinghe addressed Parliament on the 2nd, outlining the ongoing debt restructuring crucial for the country’s economic progress. Despite political skepticism from the opposition, he highlighted that the message conveyed was largely positive for the country’s interests.
The International Monetary Fund is actively involved in the restructuring process, adhering strictly to legal frameworks, regulations, and objective criteria without personal considerations.
Sajith Premadasa cited examples like Argentina, Ecuador, and Ghana, which have successfully negotiated a 25% reduction in commercial loans, separate from bilateral debts. Discussions to restructure Sri Lanka’s commercial debt are ongoing, with evolving criteria influenced by IMF assessments of each country’s economic resilience.
It is stressed that pursuing narrow political objectives without acknowledging internationally accepted realities is inappropriate in this context.
49% Stake Sale
President Ranil Wickremesinghe has taken the first step towards rebuilding the country from its recent challenges. The next crucial step is to safeguard and propel it forward, crucial in preventing a regression to conditions of two years ago.
This year’s budget allocates funds for provincial councils, pradeshiya sabha, government departments, and social security benefits like “Aswesuma,” not in anticipation of elections.
Regarding SriLankan Airlines, the approach involves restructuring rather than selling it outright. Under Sri Lankan law, only 49% of the airline’s shares can be transferred to another entity, but global interest has been minimal, with only six individuals expressing interest, none deemed suitable.
Even if a Sri Lankan entrepreneur were considered, their capabilities would need to be demonstrated.
The Japan International Cooperation Agency (JICA) will discuss resuming their projects next week, highlighting another benefit of debt restructuring. Although Chinese firms have shown interest in the airport project, contracts must be awarded to Japanese companies due to existing agreements.
Additionally, the financially burdened Mattala Airport will soon be managed by a joint venture between Russia and India. Development at the Kankesanthurai port is progressing with $69 million in assistance from India. During a recent visit to Sri Lanka, Indian Foreign Minister Dr. S. Jaishankar confirmed plans to initiate a ferry service between Sri Lanka and India soon.
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