Sri Lanka govt to take-over SriLankan debt; seek managing investor: PM
Apr 26, 2016 13:08 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's government will strengthen the balance sheet of debt-ridden SriLankan Airlines by taking over some of its debt and seek a partner who can manage and invest in the airline, Prime Minister Ranil Wickremesinghe said.
SriLankan will also seek to cancel the four aircraft ordered from Airbus, where production has not yet started, he told reporters in Colombo.
He said SriLankan Airlines was a 'landmine' for the economy. SriLankan had total debts of 3.2 billion dollars, he said.
The government will have to take over debt and strengthen its balance sheet.
The government was seeking an international airline partner or an investor, Prime Minister Wickremesinghe said.
Request for proposals will be called he said.
Without reducing its debt, no partner will be willing to take it over, analysts say.
Minister Sarath Amugunugama said the cabinet of ministers had decided to seek an international partner to avoid having to close down the airline.
Prime Minister Wickremesinghe said some of the losses of budget carrier Mihin Lanka was hidden inside SriLankan and the two airlines.
Having a plan to fix the state airlines is believed to be a 'prior action' to under a strategy developed with the International Monetary Fund to fix Sri Lanka's broken state finances.