Treasury injects Rs. 239.5 bln capital into 9 SOBEs

Nine State-Owned Business Enterprises (SOBEs) have been provided with a massive sum of Rs.239.5 billion in capital infusion, liquidity improvement and debt capitalisation, as government bolsters their sustainability amid heavy losses, official sources revealed.

This infusion was made from the 2015 budget issuing Treasury bonds to offset budgetary problems and meet capital reserve requirements and debts of those SOBEs, a senior government official said.

According to details presented to the cabinet on Wednesday by Finance Minister Ravi Karunanayake, Sri Lanka’s total debt position (foreign and local) as at July 3, 2015 is Rs. 7,959,939.39 million (Rs. 7 trillion).

According to an analysis by the Business Times based on Central Bank data for January-July 2015 of money raised by the government, US$1 billion came from sovereign bonds; $1.3 billion from SL development bonds; Rs. 416.3 billion from treasury bonds and Rs.413 billion (issues and re-issues) were from treasury bills.

In the meantime under this handout, the Ceylon Petroleum Corporation (CPC) received a sum of Rs.150 billion while Rs.60 billion was injected into National Water Supply and Drainage Board (NWSDB) and Rs. 5 billion to the Bank of Ceylon.

Some Rs.3 billion was provided to Central Engineering Consultancy Bureau (CECB), State Development and Construction Corporation (SD & CC) and State Engineering Corporation (SEC) while SriLankan Airlines (SLA) received Rs.19.5 billion, Agrarian Insurance Board Rs. 1.5 billion, and Inventor’s Fund Rs. 500 million.

The outstanding debt of SOEs to the banking system was Rs.593 billion as at end-2014. This also included the impact of US$60 million or Rs.7.8 billion of the Hedging Transaction of CPC, which has already been paid.

It has been estimated that the total loss to the government due to the oil hedging transaction could be about $120 million (Rs.15.7 billion).

This could be one of the most unbearable transactions ever recorded in the history of commercial operations in Sri Lanka with the end result adversely impacting the people, he said.

Sri Lanka has 54 SOBEs of which 10 own an asset base well in excess of market capitalisation of all listed companies in the country, he disclosed.

They include state enterprises such as CPC, Ceylon Electricity Board, Sri Lanka Port Authority, Airport Authority, NWSDB, SLA, the three large state banks and Sri Lanka Insurance.