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Thursday June 1st, 2023

Sri Lanka to resume search for investor for SriLankan Airlines

ECONOMYNEXT – Sri Lanka will re-start its search for a new partner for state-run SriLankan Airlines within the next three months through public call for offers, with a new leadership on track to cut losses, a top official said.

"The public private partnership unit in the Treasury will request expressions of interest sometime in September or October and we feel as of now we will be in negotiations with one or two interested parties by the first quarter of 2019," advisor to the finance ministry Mano Tittawella said.

"The new board at SriLankan (Airlines) has now activated a strategic business plan and are confident that by the end of the 2018/19 financial year the airline can record a significantly lesser loss than was recorded when the new board took office in April 2018."

SriLankan has lost 105 million US dollars in the year to March 2017, new Chairman Ranjith Fernando,  a former bank chief and senior public servant said.

Tittawella said there were ‘fairly serious’ parties who have already expressed interest in the airline.

The government has said it will take off legacy debt from the airline, if a new investor can run it without making further losses.

In 2017, TPG, a private equity group pulled out at the last minute after being shortlisted from a call for expressions of interest.

Sri Lankan Airlines has negative net assets, but Sri Lanka is in a strategic location within 3-4 flying hours away from South Asia, Middle East and East Asia, with a route network and airport slots that some investors feel can be used more effectively.

SriLankan made profits when it was managed and part-owned by Emirates from the late 1990s to 2008, when the Middle Eastern carrier exited following a dispute with then President Mahinda Rajapaksa, who appointed his brother-in-law as chairman. (Colombo/Aug21/2018)

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Sri Lanka exports down in April, trade deficit up from March, rupee stronger

ECONOMYNEXT – Sri Lanka’s exports fell 12.6 percent from a year ago to 849 million US dollars in April 2023, amid weaker external demand, while imports were down 15.8 percent to 1,431 million Us dollars, central bank data showed.

Exports also fell 1,037 million dollars in March 2023, amid seasonal effects.

The trade deficit expanded to 583 million US dollars in April from 412 million US dollars in March 2023. Imports were at 1431 million US dollars in April from 1,450 million dollars in March.

Imports can pick as tourism, worker remittances and net inflows to government go up.

The rupee continued to appreciate.

“Exchange rate showed a notable appreciation during April 2023 with the continued improvement in liquidity in the domestic foreign exchange market, the discontinuation of the daily guidance on exchange rates,” the central bank said.

Up to April exports were down 9 percent to 3.8 billion rupees and imports were down 28 percent to 5.2 billion rupees and the trade deficit was 1.4 billion rupees.

Investment goods imports were down in April amid a contraction in credit.

“Almost all types of goods listed under the three main investment good categories, namely machinery and equipment, building material and transport equipment, recorded a decline,” the central bank said.

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Sri Lanka President discusses debt restructure, program progress with IMF

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.

“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.

“Attention was also paid to the on-going debt restructuring negotiations.”

State Minister of Finance Shehan Semasinghe, Senior Advisor to the President on National Security and Chief of Presidential Staff Sagala Ratnayake was also in the meeting.

Secretary of the Ministry of Finance Mahinda Siriwardena, Central Bank Governor Nandalal Weerasinghe, Deputy Director of the International Monetary Fund Anne Marie Gulde, and Resident Representative IMF in Sri Lanka Sarwat Jahan, attended this event. (Colombo/June01/2023)

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Sri Lanka cuts petrol to Rs318 a litre, kerosene to Rs245

ECONOMYNEXT – Sri Lanka has cut petrol 92-Octane by 15 rupees to 318 rupees a litre and kerosene by 50 rupees to 245 rupees a litre from midnight May 31, the Ministry of Energy said.

Petrol 95 Octane will be raised by 20 rupees to 385 rupees, and Lanka Super Diesel 4 Star Euro 4 will be raised by 10 rupees to 340 rupees a litre.

Lanka Industrial Kerosene will be cut by 60 rupees a litre to 270 rupees.

Kerosene which is similar to jet fuel is usually the most expensive fuel in international markets followed by diesel and petrol is usually the cheapest.

Kerosene which is substantially cheaper than diesel is also used by buses to cut costs. (Colombo/May31/2023)

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