State enterprises’ outstanding debt expands to Rs.333bn

The total outstanding debt of t he country’s non-financial state-owned business enterprises (SOBEs) has swollen by as much as Rs.12 billion during the first five months to Rs.333.3 billion by the end of May 2013, Mirror Business observes.

The corresponding figure by the end of 2012 was Rs.321.5 billion by 26 SOBEs.

Ceylon Petroleum Corporation (CPC), the Ceylon Electricity Board (CEB) and SriLankan Airlines Limited (SriLankan) topped the list. The former two institutions increased their outstanding debts during the first five months while the latter marginally reducing its outstanding balance.

The mid-year fiscal position report released by the Finance Ministry showed CPC increasing its outstanding debt by Rs.15.5 billion to Rs.226 billion, while the CEB by Rs.5.6 billion to Rs.49.4 billion.

Sri Lankan marginally reduced its debt to Rs.44 billion by end of May.

Most notable was the deteriorating debt performance of the national budget carrier, Mihin Lanka Limited. The company has borrowed to the tune of Rs.433 million during the first five months, increasing its total outstanding debt to Rs.436 million. The airline’s outstanding debt by the end of last year stood at just Rs.3 million.

During the five months to end of May 2013, a total of 10 SOBEs increased their outstanding debt while 11 SOBEs reduced or settled their level of debt. State Pharmaceutical Corporation more than halved its outstanding debt during the five months to Rs.3.2 billion from Rs.7.9 billion. Further, Colombo Commercial Fertilizer Company Limited appears to have settled its total outstanding debt of Rs.3.6 billion. According to the Finance Ministry, the SOBEs incurred a cumulative loss of Rs.250 billion in 2012 out of which, CPC (Rs.89.6 billion), the CEB (Rs.61.1 billion) , SriLankan (Rs.25.9 billion) and Mihin Air (Rs.2.8 billion), incurring a combined loss of Rs.180 billion.

Based on the recommendations by the Committee on Public Enterprises (COPE) and the stringent monitoring efforts by the General Treasury by way of price adjustments and reorganisation of the operations are being undertaken in non-financial SOBEs to direct their losses to a debt reduction path. According to state-owned enterprises and the Department of Public Enterprises, there are 44 SOBEs operating in Sri Lanka.