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UL seeks commercial borrowing to stay afloat

27 Nov 2011 - {{hitsCtrl.values.hits}}

The cash strapped SriLankan Airlines is to go in for a commercial borrowing of US$175 million from external sources to meet its funding requirements, officials said yesterday.

The Civil Aviation Ministry sought an allocation of US$500 million from the budget over a period of three years for the airline which recorded a loss of Rs.2.6 billion last year. The Ministry also asked for US$20 million each over a period of three years to meet the financial requirements of Mihin Lanka which has incurred a loss of Rs.7 billion since its inception.

However, the government has announced an allocation of US$100 million each for a period of three years for SriLankan Airlines and US$10 million each for a period of two years for Mihin Lanka.

Sri Lankan Airlines Chief Executive Officer Kapila Chandrasena told the Daily Mirror there was a deficit of US$175 million in the financial requirement of the national carrier, and it would be met with a commercial borrowing from external sources.

Mr. Chandrasena, however, said nothing in this regard had been finalised yet.

“We are discussing it. We wanted US$500 million in three years. Yet, we were promised it in the budget in five years. There is a gap in our financial requirement. To bridge that gap, a commercial borrowing will be considered,” he said.

Also, he said plans were underway to increase the airline’s fleet to 30.

“Now there are only 20 aircraft in our fleet. New flight schedules have been planned to destinations in Europe,” he said.

“We will start a flight to Zurich on December 23. We are also considering a few more destinations in Africa, China and Australia,” he said.

Meanwhile, UNP Dayasiri Jayasekara who participated in the select committee appointed to discuss the budgetary allocations for 21 ministries, said the country’s debt burden would be worsened with this borrowing. (Kelum Bandara)

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UL seeks commercial borrowing to stay afloat

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