Treasury to absorb SriLankan liabilities

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 career. He said the national career 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 career,” 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 deterrence.

He said the airlines from the 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 career amounting to Rs.461 billion.