11 November 2016 12:00 am
The government is hoping to raise US$ 1 billion through the listing of state-owned enterprises (SoEs) during the upcoming financial year for the purpose of debt repayment.
“By broad basing the ownership, it is expected that such listing will allow the government to raise at least US$ 1,000 million, to settle our existing uneconomical, questionable and high cost debt that we inherited from the previous regime,” Finance Minister Ravi Karunanayake said at the 2017 budget.
He said that the SoEs Hyatt, Grand Oriental Hotel, Waters Edge, West Coast, Manthai Salt, Hambanthota Salt, and Hilton are included in this list of non-strategic investments.
Further he added that Mobitel will be listed according to a request from its board of directors, though Karunanayake did not specify whether the government will exit the company.
President Maithripala Sirisena has forbidden the government from divesting ownership in profit-making SoEs.
The proposal to list SoEs was presented at the 2016 budget, but the government did not fulfil it during this year.
The last year’s list had included Mobitel, Lanka Hospitals and Ceylinco Hospital, but had not included West Coast, Manthai Salt and Hambantota Salt.
However, Karunanayake left the door open for further listings during the year.
“We will also inform the Parliament of any other planned listing that may be undertaken during 2017,” he said.
SoE reforms are included as a part of the International Monetary Fund demands for providing the US$ 1.5 billion loan for servicing the country’s balance of payments.
Local investors such as John Keells Holdings PLC have already expressed their interest in taking over some of the SoEs.