Sri Lanka’s airline sell off fails, seeks new partner
COLOMBO: A US equity firm that bid to buy a stake in Sri Lanka’s lossmaking national airline has pulled its offer, officials said Saturday as the carrier scrambled for a new partner.
TPG, a San Francisco-based private equity firm, has withdrawn its bid for a 49 percent stake in Sri Lankan, dashing hopes of a quick revival of the airline.
“After completing the due diligence, regrettably TPG have informed us they will not pursue a potential investment in Sri Lankan airlines,” Sri Lankan Chairman Ajith Dias said in a memo to his staff.
“It is their opinion that allocating the human and financial resources to make the airline profitable will not realize sufficient returns compared to the many other investment opportunities that are available to them,” Dias said.
There was no immediate comment from TPG.
Sri Lanka’s flag carrier has accumulated debts and losses of over $2 billion.
Talks are now underway with Dubai’s Emirates, which had managed and owned a minority stake in Sri Lankan for a decade and was interested in a new management deal, official sources said.
There was no immediate comment from Emirates.
Sri Lankan was profitable before former Sri Lankan President Mohinda Rajapakse canceled a management agreement with Emirates in 2008 following a personal dispute.
The carrier had refused to bump fare-paying passengers and give their seats to Rajapakse’s family members.
An angry Rajapakse removed the Emirates-appointed CEO of Sri Lankan from the post and replaced him with his own brother-in-law, who had no airline experience and is now under investigation for corruption.
Late last year, in an effort to cut costs, Sri Lankan canceled the previous government’s order to lease four brand new Airbus A350-900 longhaul aircraft after paying a penalty of $115 million to aircraft leasing giant AerCap.
A separate order for four Airbus A350-900 planes will also be canceled, the government has said.
Rajapakse had ordered all eight planes as part of a $2.3-billion refleeting program for the airline,
WASHINGTON: Main Street lenders emerged from a meeting with US President Donald Trump this week confident that his vision for an overhaul of banking regulation would set up a favorable environment for their industry.
Reducing lending rules for the industry, a key source of credit for small businesses and farmers that has been shrinking and struggling under post- financial crisis regulation, is one of the few things both political parties, as well as the president, can agree on.
“They understand our business model and have an appreciation for the fact that community banks are unique,” Rebeca RomeroRainey, chief executive of Centinel Bank of Taos, New Mexico, said of the administration.
Trump has suggested resurrecting a form of the Depressionera Glass- Steagall law to separate capital markets operations from traditional lending. He has not consistently defined what that would look like but has floated the idea of an actual breakup of large banks, a prospect that bosses of Wall Street lenders have downplayed.
Signs have emerged, however, that at the very least Trump and his team are interested in creating a system that involves fewer rules for smaller banks.
“The president’s pro- growth agenda, including instituting what he has called a ‘ 21st century Glass- Steagall,’ will allow these banks to spend less time complying with unnecessary requirements, many of which were designed to police much larger entities, and more time infusing their communities and local small businesses with capital,” White House spokesman Sean Spicer said this week.
The influence of the industry was on display this week when Trump and his senior lieutenants feted community bankers at the White House ahead of their annual conference on Monday, a show of access and acceptance not seen in recent administrations.