Sunday Times (Sri Lanka)

SriLankan Airlines to get $75 m loan

- By Bandula Sirimanna

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.

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