The Sri Lanka government is grappling to revitalize the state-run national carrier, SriLankan Airlines, by entering into a public-private partnership (PPP) with a foreign airline or an aviation company.
The negotiations with US private equity firm TPG Capital to restructure the airline collapsed following due diligence of the struggling airline that is saddled with a US$ 1billion debt burden. The Ministry of Finance will seek preliminary bids for SriLankan Airlines by next month, ministry sources said.
The government expects to be in talks with at least two prospective investors by the first quarter of next year. The government has called for bids and offered to absorb all the company’s debt in 2016 and eight parties have expressed their interest so far, ministry sources said.
The interested parties include the buyout firm Blackstone Group LP as well as TPG. The company’s accumulated losses have increased to LKR 141.1 billion (USD 879 million) as of March 2017.
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