US-based investment firm Texas Pacific Group (TPG) has pulled out of talks with the Sri Lankan government over a 49% stake in SriLankan Airlines (UL, Colombo International).
An internal company memo sent to staff by Chairman Ajith Dias and seen by ch-aviation said TPG's decision to withdraw came after it had conducted a due diligence of the heavily indebted state-owned carrier.
"It is their opinion that allocating the human and financial resources to make the airline profitable will not realise sufficient returns, compared to the many other investment opportunities that are available to them," he said.
Dias added that the Sri Lanka government is "pursuing other options in finding a partner" while urging staff to improve their work performance.
TPG was one of three shortlisted firms following a tender process. The other two contenders included local consortium PeaceAir Pvt Ltd. and Maldivian firm Super Group Partners. Given TPG's perceived inexperience in running an airline, Colombo had also sought to a technical partner in the form of a large-scale foreign operator.
In the interests of expediting a deal, the Sri Lankan government had pledged to absorb the carrier's liabilities said to stand at over LKR461 billion (USD3.15 billion).
Meanwhile, SriLankan Airlines is planning to resume service to Australia following a sixteen-year absence. Sources who spoke to Australian Business Traveller report 4x weekly flights from Colombo International to each of Melbourne Tullamarine and Sydney Kingsford Smith are to start towards the end of the year. The carrier had outlined plans to run a 4x weekly Colombo-Melbourne Tullamarine service using A330-300 metal in November 2015 but ultimately decided against launching the route.
