Sri Lanka's Aviation Minister says the Sri Lankan Cabinet has recently agreed to take over debts of USD510 million belonging to SriLankan Airlines (UL, Colombo International) and will also provide USD60-70 million in working capital for the flag carrier over the next six months. It comes as the government agency running the privatisation of the airline has extended the expressions of interest (EOI) deadline for the fourth time.
Last week, Nimal Siripala de Silva told local news outlets about the cabinet decision. He said that if the government takes on the debt, it is still "possible" to secure a high-quality investor in the airline. He added that all monies earned from the privatisation will go to the government treasury.
Meanwhile, the Enterprise Restructuring Unit (ERU), part of the Ministry of Finance, announced on March 4 that the March 5 deadline had been pushed out to April 22.
Last year, when the government decided to sell at least 51% of the state-owned carrier, the initial EOI deadline was December 5, 2023. This was later extended to January 9, then to February 6, then March 5, and now April 22. As with previous extensions, the ERU did not disclose a reason. However, de Silva said it was at the request of the International Finance Corporation (IFC), the World Bank's investment and transactions arm, which is acting as the transaction advisor on the privatisation. ch-aviation has contacted the IFC for comment.
As a result of the latest extension, the ERU has pushed back other stages in the sale process. The opening of the date room will now not occur until May, with the issuance of the RFP and draft definitive agreements now due to go out later in the same month. One-on-one meetings have rescheduled to occur in June, and site visits will take place in July. The current bid submission deadline is an unspecified date in August, with the evaluation and selection of the successful bidder expected to take place later that month. After issuing a letter of intent, the ERU now foresees cabinet approval and signing of the definitive agreements to take place in late September.
