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AirAsia and FitsAir among bidders for Sri Lanka’s national carrier

By: Staff Writer

April 23, Colombo (LNW): Malaysian budget carrier AirAsia is among six bidders for the divestititure of state-run Sri Lankan Airlines in the request for qualification (RfQ) process extended for four times on the request of the International Finance Corporation (IFC), the transaction advisor on the privatization, the finance ministry announced.   

Last year, when the government decided to sell at least 51% of the state-owned carrier, the initial RfQ deadline was December 5, 2023. This was later extended to January 9, then to February 6, then March 5, and April 22 2024.

This was to facilitate the transfer of select Dollar and Rupee debt to the Treasury which was done in March 2024.

Selection of pre-qualified bidders is now extended to May from March and bid submission deadline from May to August and issuance of Letter of Intent from end June to August and Cabinet approval on definite agreement and its signing from June to end September 2024.

AirAsia Consulting has submitted a request for qualification from potential investors for the acquisition of shares in SriLankan Airlines Limited, a statement released by Sri Lanka’s finance ministry said.

FitsAir, Sri Lanka’s privately-owned low-cost airline, has also submitted a RfQ for the acquisition of shares in SriLankan Airlines.

The other front liner was the Hayleys PLC whose controlling shareholder and Co-Chairman Dhammika Perera billioneir businemen of Sri Lanka

The document also named Dharshaan Elite Investment Holding (Pvt) Ltd, Sherisha Technologies Private Limited, and Treasure Republic Guardians Limited as the other bidders.

Sri Lanka’s Aviation Minister Nimal Siripala De Silva says the Sri Lankan Cabinet has recently agreed to take over debts of USD510 million belonging to SriLankan Airlines (UL, Colombo International).

It will also provide USD60-70 million in working capital for the flag carrier over the next six months.

He added that managing the national carrier as a joint venture is the solution as SriLankan was in total debt up to US$ 1.8 billion

Sri Lankan Chairman Ashok Pathirage disclosed that the airline earns over Rs. 330 billion turnover and with the acquiring of more aircraft this can be further increased, he added.

Economic expert Professor Wasantha Athukorale of the Peradeniya University said SriLankan Airlines has recorded losses due to inefficiency and weak administration of politicised top management who were incompetent in making the airline profitable.

During the previously completed fiscal year 2022/2023, the airline generated a passenger and cargo revenue of $ 994 million and an operating profit of US$53 million after recording losses during the past few years.

The operating profit at group level was $104 million. The group‚ however‚ incurred financing costs of $101 million, resulting in a profit of $ 3 million.

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