The Government is currently in the process of restructuring the Sri Lankan Airlines wile planning to infuse capital of around US $250 million from China Development Bank to get over its mounting debt burden, a top official said.
Sri Lanka's Public Private Partnership Agency (SLPPpA) is currently negotiating with China Development Bank to pay off two third of Sri Lankan Airlines debt under a re–financing system, he said.
This was disclosed by the PPP agency chairman Thilan Wijesinghe during the hearing of the parliamentary committee on public enterprises On Thursday 22.
Point blankly refusing to take over the airlines debt by the treasury, Secretary to the Ministry of Finance, Dr. R.H.S. Samaratunga stated that the government has not yet taken a decision as to whether debt amounting to US $900 million should be settled by the government itself.
An Expert Committee appointed by President Maithripala Sirisena has recommended to restructure the SLA through financial, corporate, and human resource restructuring and developing an effective strategic plan.
The total loss of SLA has increased to Rs.12,961 million in the first four months of 2019, while the total debt of SLA has exceeded USD 750 million.
Further, the Government is currently bearing USD 375 million and Rs.26,250 million of contingent liabilities piled up since 2014.
his includes the guarantee granted for International Bonds and letters of comfort issued to obtain loans during the BIA closure in 2016.
Therefore, it is observed that there was a need to have a significant business restructuring model, owing to the high possibility for the Government to bear the loss, and also due to the high correlation between Aviation industry and the tourism sector in the country.
(LI)