Mar 08, 2017 (LBO) – SriLankan Airlines restructuring plan with the shortlisted private equity fund TPG may take over six months to arrive at a possible agreement, Deputy Minister of Public Enterprise Development Eran Wickramaratne said.
Wickramaratne told reporters Wednesday that discussions with regard to the subject of airlines is a complex matter to be deal with.
“There were eight bidders initially then it reduced to three and now shortlisted to only one party,” Wickramaratne said.
“It’s the private equity fund called TPG who is now doing the due-diligence. We have only selected them as a partner of SriLankan Airlines. Discussions with them will continue at least for six more months.”
Texas Pacific Group (TPG) which was launched in 1992 with the buying of Continental Airline in 1993 has invested in many airlines including American Airlines, Ryan Air and Mid-West Airlines and owns direct and indirect stakes in several leading airlines.
“It was among the shortlisted bidders for SriLankan in 1997 but we went for the Emirates partnership,” Wickramaratne said.
“We may have to bring in more than one company to revamp the current Airline and with TPG we can do so by bring in another into SriLankan Airlines.”
However, Finance Minister Ravi Karunanayake has said that Sri Lanka is seeking higher bids to restructure the airline after three short-listed firms failed to give what he called “sizable” bids.
He has said that the government has not decided on the bids yet as they were below expectations.
Sri Lanka is planning to sell up to 49 percent of SriLankan Airlines along with management control.