TREASURY TO ABSORB SRILANKAN LIABILITIES

TREASURY TO ABSORB THE TOTAL LIABILITIES OF SRILANKAN AIRLINES AFTER WRITING THEM OFF ITS BALANCE SHEETS

The government decided to create a Special Purpose Vehicle (SPV) under Treasury to absorb the total liabilities of Srilankan Airlines after writing them off its balance sheets, a Minister said yesterday.

Public Enterprises Development Minister Lakshman Kiriella told Daily Mirror it was a pre-requisite to strike an equity sharing arrangement with an investor to develop the national carrier. He said the national carrier should start with a clean balance sheet with no debt burden. “We had talks with the Finance Ministry a couple of weeks ago and decided to create the Special Purpose Vehicle. It is an entity to transfer the liabilities of the national carrier,” he said.

The Minister said a lot of investors including foreign airlines had shown interest in investing in Sri Lanka’s national career, but outstanding debt volume, accumulated over a period, had been a deterrence.

He said airlines from countries such as Japan, China and Germany were keen to partner with

Sri Lankan Airlines under an equity sharing arrangement.

“We are contacted by a lot of investors. There are several airlines from China alone. But, the liabilities are a problem,” he said.

Earlier, the Cabinet had granted approval for the government to absorb the total liabilities of the national carrier amounting to Rs.461 billion.