July 17, 2024
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    SriLankan Airlines to Undergo Restructuring, Not Sale Featured

    July 04, 2024

    Minister of Ports, Shipping, and Aviation Nimal Siripala de Silva affirmed that SriLankan Airlines 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, yet no suitable investor has expressed interest thus far.

    Addressing the press briefing titled “Collective Path to a Stable Country” at the Presidential Media Centre (PMC) Yesterday (03), Minister Siripala de Silva further elaborated;

    President Ranil Wickremesinghe addressed Parliament Tuesday (02), outlining the on-going debt restructuring crucial for the country’s economic progress. Despite political scepticism from the opposition, he emphasized that the message conveyed was largely positive for the country’s interests.

    Furthermore, the International Monetary Fund is actively involved in the restructuring process based strictly on legal frameworks, regulations, and objective criteria, without regard to personal considerations. Sajith Premadasa noted examples such as Argentina, Ecuador, and Ghana, which have successfully negotiated a 25% reduction in commercial loans, distinct from bilateral debts. Discussions to restructure commercial debt within Sri Lanka are on-going, 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 would be inappropriate in this context.

    President Ranil Wickremesinghe has initiated 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 not only for provincial councils, pradeshiya sabha and government departments, but also for social security benefits like “Aswesuma”. Those activities are not being conducted in anticipation of the elections.

    Furthermore, SriLankan Airlines should be addressed here. Our approach involves restructuring the airline rather than selling it outright. Under Sri Lankan law, only 49% of SriLankan Airlines’ shares can be transferred to another entity. However, there has been minimal global interest in this opportunity, with only six individuals expressing interest, none of whom were deemed suitable. Even if we were to extend this opportunity to a Sri Lankan entrepreneur, their capabilities would need to be demonstrated.

    Additionally, the Japan International Cooperation Agency (JICA) is set to discuss the resumption of their projects next week, marking another advantage of debt restructuring. Despite interest from Chinese firms in the airport project, contractual obligations with Japan stipulate that contracts should be awarded to Japanese companies.

    Furthermore, the management of the financially burdened Mattala Airport will soon be entrusted to a joint venture between Russia and India. Development at the Kankesanthurai port is progressing with assistance amounting to USD 69 million 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 in the near future.

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