SriLankan Airlines to get $75 m loan

Debt- ridden SriLankan Airlines ( SLA) will receive a US$ 75 million loan from Bank of Ceylon ( BOC) and People’s Bank ( PB) based on a Treasury guarantee which will also provide another sovereign guarantee to an international bank worth $ 5 million for the airline to seek further funding.

This is part of government efforts to sustain the airline and ensure future operations, official sources said.

Even though the SLA’s operational performance was disturbed due to COVID-19, the national carrier continues its contribution in difficult times operating several mercy and charter flights without considering the financial impact, sources said.

Meanwhile a senior Treasury official said a directive is to be issued to restructure current loans of BOC and PB to long term loans and exemption of tax, interest and charges by direct government and government institutions,

BOC and PB granted loans amounting to $ 25 million each to fund the losses of the airline.

During April and May 2020, SLA recorded $27.1 million in revenue but incurred a loss of $ 48.7 million. SLA is expected to most likely end with a loss of $ 185.3 million for 2020/ 21 accounting period due to the adverse impact on the aviation industry, provisional estimates revealed.