TPG turns away from Sri Lanka state airline
May 05, 2017 22:08 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - TPG, a US based private equity firm that was in talks to invest in state-run SriLankan Airlines had decided not to invest in the loss-making carrier as they have better things to do with their money.
"…[R]egrettably, TPG have informed us hey will not pursue a potential investment in Sri Lankan Airlines," Chairman Ajit Dias told staff in a memorandum seen by EconomyNext.
"It is their opinion that allocating the human and financial resources to make the airline profitable will not realize sufficient returns, compared to the many other new investment opportunities that are available to them."
Dias told staff that the Sri Lanka government is "pursuing other options in finding a partner" and staff to make efforts to improve performance.
SriLankan Airlines had suffered heavy losses about a billion US dollars in losses after ex-President Mahinda Rajapaksa terminated a deal with then managing shareholder Emirates over a tiff involving bumping paying passengers to accommodate a presidential entourage.
A new administration that came into power in 2015, changed the board and sacked ex-President Rajapaksa's brother-in-law as chairman amid allegations of mis-management and fraud.
SriLankan has continued to make losses despite low fuel prices and growing tourist arrivals though some excess costs have been trimmed by new management. (Colombo/May05/2017)