World Bank to assist with sale of SriLankan Airlines
Sri Lanka’s Ministry of Finance is liaising with the International Finance Corporation (IFC) a subsidiary of the World Bank regarding the divestment of state-owned SriLankan Airlines, along with subsidiaries SriLankan Catering Limited and SriLankan Ground Handling Limited.
The moves follow the government bringing multi-national financial advisory firm, Lazard, onboard to assist in the sale process. This week, the Sri Lankan government called for expressions of interest from advisors to assist with the sale of stakes in seven state owned enterprises (SOEs), including SriLankan Airlines. A statement posted on the website of the Ministry of Finance’s State Owned Enterprise Restructuring Unit (SRU) says the government is in “the process of implementing deep economic reforms” across its multiple SOEs. “Such reforms are intended to enhance competition, productivity and efficiency across the economy.”
The divestitures appear to be split into two tranches, with Sri Lankan Airlines in the second group along with Sri Lanka Telecom and Lanka Hospital Corporation. However, the sale of a stake in the SriLankan Airlines would raise additional capital, which presumably, could be used to pay down part or all of the remaining debt. The SRU says the advisors will provide support services regarding sell-side due diligence, valuation, data room creation, transaction strategy, and marketing of SriLankan Airlines, its subsidiaries, and the other SOEs.
“The divestitures will be carried out by the SRU in a transparent and credible manner following an EOI/RFP process which will be published in the local and international press,” says the Ministry of Finance statement. “Unsolicited proposals will not be entertained.”