SriLankan Airlines (UL, Colombo Int'l) has reached an agreement with the Ceylon Petroleum Corporation (CPC) concerning the settlement of its LKR13.45 billion rupee (USD84.6 million) debt.

The CPC had earlier warned the state-owned carrier that it risked being cut off if it failed to make a USD6.3 million payment by July 4.

Speaking to Sri Lanka's Daily News, CPC managing director Neil Jayasekara said following talks with the Public Enterprise Development Ministry Secretary Ranjith Hewawitharana, CPC Chairman Dhammika Ranatunga and SriLankan Airlines Chairman Ranjith Fernando at the CPC on July 2, the airline agreed to pay LKR800 million with the remainder to be paid in instalments.

SriLankan Airlines will need to obtain Cabinet consent for a loan from a private bank to pay the balance due amount. As such, the CPC will continue to supply fuel to SriLankan Airlines.