18-Feb-2010 11:00 AM

Sri Lankan Government expresses interest to purchase Emirates' stake in SriLankan Airlines

SriLankan Airlines Chairman, Nishanta Wickremasinghe, announced the SriLankan Government is negotiating with Emirates regarding the potential purchase of the Middle East carrier’s stake in SriLankan, which the government has "decided to purchase” (Bloomberg, 17-Feb-2010). Emirates did not renew its management contract at the carrier in Jan-2008, prior to the start of the 2008/09 financial year (which commenced on 01-Apr-2008). While Emirates retained its 43.63% shareholding in the carrier, it handed back the management function to the SriLankan Government. The government holds a 51.05% stake in SriLankan, while its employees own the remaining 5.32%. Emirates President, Tim Clark, responded to reports stating, “they [the Sri Lankan Government] have put out feelers that's all...to see whether we are interested” (Reuters, 17-Feb-2010). Emirates reportedly paid USD70 million for the SriLankan stake.

Meanwhile, SriLankan Airlines CEO, Manoj Gunawardena, stated the carrier broke even in Dec-2009 (Bloomberg, 17-Dec-2009). The carrier plans to take delivery of an A330 or A340 by Oct-2010, as well as two A320s as traffic increases. The carrier took delivery of three A320s between Mar-2009 and Jun-2009.

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