US$85mn Sri Lankan Catering IPO to hit market in first quarter of this year

1 January 2016 06:54 am

By Chandeepa Wettasinghe 
SriLankan Catering, a fully-owned subsidy of state-owned national carrier SriLankan Airlines is considering going for a US$85 million initial public offering (IPO) in the next 2-3 months. 
“Yes, that’s one of the options on the cards, but it hasn’t been decided yet,” a reliable source at SriLankan Airlines told Mirror Business.
The government will have the final say on the matter, and is expected to make a decision within the next 3 weeks.
The source said that no managers to the issue have been officially appointed yet, but that 3 companies have been canvassed.

The new regime seems to favour the listing of state-owned companies, as the 2016 budget said that many would be listed next year.
According to the source, the IPO would offer around 40-45 percent of the shares in SriLankan Catering, hoping to raise US $85 million.
The company currently has a stated capital of around US$ 200 million.

SriLankan Catering provides in-flight meals to over a dozen airlines flying to Colombo, and also operates a transit hotel and a coffee shop in the Katunayake Airport, as well as a restaurant and a tea house in Colombo. 
It is also planning to launch outdoor catering services soon.

“The funds will be used to retire some of the debt of SriLankan Airlines,” the source went on to say.
The parent company had run into losses amounting to over Rs.131 billion under gross mismanagement and corruption under the past regime.