Sri Lanka has offered Dubai’s Emirates Airline $55 million to buy back the 43.6 percent stake it holds on Si Lanka’s national carrier, a media report said.
“Sri Lanka is going to buy it … $55 million is the price we have indicated,” Finance and Treasury Secretary Dr. P.B. Jayasundara has told Reuters news agency in an interview. Sri Lankan government has been negotiating with Emirates to buy its stake since the beginning of this year. The Emirates had no immediate comments but earlier it had said that it was willing to sell the stake at the right price.
Sri Lankan Government in 1998 signed an agreement for a ten-year strategic partnership with the Emirates for the Dubai-based airline to purchase 40 percent stake of the national carrier worth US$70 million. Emirates later increased the stake to 43.6 percent.
Although the Sri Lankan government retained the majority stake, it gave full control on investment and management decisions to Emirates.
In 2008, Sri Lankan government notified Emirates Airlines that it will not renew the management contract once it expires on March 31, 2008.
In December 2007 the government decided to revoke the work permit of Emirates-appointed SriLankan’s CEO Peter Hill.
Emirates handed over the management control of SriLankan to the government of Sri Lanka from April 1, 2008. According to the Reuters’ report, Emirates has been trying to sell all or part of the stake since 2008, which had previously been valued at about $150 million.
Jayasundara has said that the deal is almost finalized and the government is seeking a strategic partner.
“We are looking for a strategic partner or somebody from the government to take that (the stake) and maintain the commercial character of SriLankan (Airlines),” he was quoted.
The government will facilitate the transfer “to Bank of Ceylon or somebody who can basically participate in a business,” Jayasundara has told the Reuters. colombopage