CHATURANGA PRADEEP SAMARAWICKRAMA Reply To:
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Govt. to sell 49% SriLankan Airlines shares of SriLankan Catering, Ground Handling to a foreign investment company
While restructuring SriLankan Airlines and its subsidiary companies, the government has decided to sell 49% shares and administration of SriLankan Catering and also 49% shares and administration in SrLankan Airlines’ Ground Handling to a foreign investment company.
Addressing the media, Ports, Shipping and Aviation Minister Nimal Siripala de Silva said the remaining 51% shares are currently with the Sri Lankan government.
However, it is proposed to utilize the money that will be obtained by restructuring SriLankan Catering Limited and ‘Ground Handling’ to settle the creditors of Sri Lankan Airlines.
It is to incorporate a separate company as a subsidiary of Sri Lankan Airlines for the ‘Ground Handling’ division with the respective assets and staff involved in ‘Ground Handling’.
Upon such incorporation, 49% shares of the SriLankan Airlines and its management to be transferred to a competent investor chosen through a transparent procurement procedure.
If the restructuring could be completed successfully, foreign debts of US$175 million and the Bank Overdraft obtained from the Bank of Ceylon for US$80 million could be repaid as Priority Payments.
Further to that US$ 80 million, the arrears amount due on Aircraft leasing could be paid and then, there won't be any foreign debts to be paid.
When US$ 312 million, the arrears payments to Ceylon Petroleum Corporation (CPC) is settled, the CPC will also turn out to be a financially stable institution. Therefore we believe SriLankan Airlines, its debtors and its employees could only be protected through above restructuring process.
SriLankan Airlines does not have the financial viability to repay the mortgages and loans it has obtained as the operation of the airline was severely affected for the past few years.
Major drop in the tourism industry and the dwindling number of overseas visitors after Easter Sunday Attack, COVID-19 pandemic, the global economic recession, severe economic crisis and political instability and social status in Sri Lanka have made a significant impact on SriLankan Airlines.
Restructuring of SriLankan Airlines and obtaining Capital Investments is critically vital and if such capital infusion does not happen, the national carrier will certainly be grounded and the company will have to be closed down which would end up creating social chaos, as 6,370 local and foreign employees working for the airline covering areas of Administration, Cabin crew, Aircraft Maintenance Engineers etc. will lose their jobs.
It is the responsibility of the Government to safeguard the employees of SriLankan Airlines and its subsidiaries without creating an environment for retrenchment. (Chaturanga Samarawickrama)
Pix by Kithsiri de Mel
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