Srilankan says new board will accelerate restructuring

The Finance and Mass Media Ministry yesterday said the new director board under the chairmanship of Ranjit Fernando will accelerate the restructuring process of the airline and create an enabling environment to proceed with entering into a public-private partnership (PPP) with a strategic investor.

The other board members appointed include Mano Tittewella (Finance Ministry), Dr. Roshan Perera (Central Bank), Air Marshal Kapila Jayampathi (Air Force Commander) and Susantha Katugampala (Lawyer/ Barrister).

Fernando was chosen to head the board based on his experience in transforming the then state-owned National Development Bank (NDB), where he served from its inception in 1979 until his retirement in 2001.

He was appointed as a Director/ CEO of the bank in 1989 and gave leadership to the growth of the bank including its privatization and an extremely successful public issue of shares in 1993 and NDB becoming a universal bank, adding commercial banking with the acquisition of ABN Amro, insurance, venture capital, stockbroking and investment banking to its product portfolio.

After retirement, Fernando functioned as the Industries Ministry Secretary, Chairman of several public listed companies and the Urban Development Authority.

He is an Attorney-at-law, possessing a Bachelor of Law (Hons) Degree and is a Fellow of the Chartered Institute of Management Accountants (UK), Chartered Institute of Bankers (UK) and a Companion of the Chartered Institute of Management (UK).

The Finance Ministry said the restructuring and PPP process will continue to be guided by the officials committee chaired by the Treasury secretary with the participation of Public Enterprise Development Ministry Secretary and National Agency for Public Private Partnership (NAPPP) Chairman Thilan Wijesinghe. Wijesinghe serves as the Convener of the Officials Committee.

The officials committee, set up in September 2017, will continue to refer required areas for direction by the Ministerial Committee chaired by the prime minister and for implementation by the board of Srilankan Airlines.

Aviation Consultants, Nyras of UK, hired after a competitive process in November 2017 by the Officials Committee, will continue to report to the Officials Committee. This working arrangement is to ensure shareholder (Treasury) interests are adequately addressed in the restructuring process.

The final restructuring plan prepared by Nyras with the assistance of the NAPPP has already been presented to the Ministerial Committee and will be submitted to the cabinet of ministers for approval upon being endorsed by the new board of directors.

Nyras has presented a detailed business plan that demonstrates the Srilankan Airlines group can become viable in the short to medium term through the restructuring strategy. This has similarities to the strategy adopted by Swiss Air and Aer Lingus, both advised by Nyras that resulted in turning these loss-making airlines turning into extremely profitable companies.

The NAPPP, with the assistance of Nyras, will coordinate the PPP process that will be implemented in parallel with the restructuring process and advise the Finance Ministry and Officials Committee.

The NAPPP will also advise the Officials Committee on the debt restructuring process designed to mitigate any impact on the General Treasury and state banks – the largest lenders to Srilankan Airlines.