Sri Lankan privatization plans likely part of any IMF deal

Commercial units of SriLankan Airlines to be partially privatized

08.31.2022 – 03:18 UTC

The government of Sri Lanka is set to sell 49% of the profitable catering and ground services branches of SriLankan Airlines (UL, Colombo Int’l) in a bid to reduce the debt levels of the common carrier which, the minister Aviation’s Nimal Siripala de Silva said this week, amount to $1.05 billion.

“SriLankan Airlines does not have the financial capacity to repay debts and rents owed to local and foreign parties, including aircraft lessors, and the government is unable to continue funding the airline in the future. current environment,” de Silva told a press conference in Colombo.

According to the minister, the airline owes $446 million to local banks, $80 million to aircraft lessors and $325 million to domestic entities, including Ceylon Petroleum Corporation, Sri Lanka’s Airport and Aviation Services Ltd. and the Civil Aviation Authority of Sri Lanka. The airline must also pay a $175 million bond soon.

The Minister said that the Sri Lankan government has decided to invite private investors to express their interest in acquiring 49% of the shares…

SriLankan Airlines settles bond interest payment

28.07.2022 – 09:33 UTC

SriLankan Airlines (UL, Colombo Int’l) announced on July 26 that it had “taken the necessary steps” to settle interest on its government-guaranteed US$175,000,000 bond due June 2024.

The bond has an annual coupon rate of 7% and interest due to bondholders “has been paid in full within the applicable grace period using company funds,” the cash-strapped carrier said in the brief statement.

The bond was issued in June 2019 and payments were made semi-annually on June 25 and December 25 each year with the Sri Lankan government as guarantor.

However, in a filing on the Singapore Stock Exchange several weeks ago, the majority state-owned carrier admitted it had missed payment on June 25 this year, blaming the near-bankrupt state for the island’s economy. He would use the ensuing 30-day grace period to reassess his position, he said, leading many to expect an imminent bond default.

The government itself defaulted for the first time when $78 million in unpaid debt interest payments expired on May 18. Central…

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