SriLankan Catering IPO shelved

An Initial Public Offering (IPO) conceptualized for the state-owned national carrier’s fully owned subsidiary SriLankan Catering to cover some of the debt plaguing its parent, will not materialize for the foreseeable future, a top official said this week. “That at the moment is not something on. There were thoughts about it,” SriLankan Airlines Chairman Ajith Dias said. Mirror Business reported last December that SriLankan Airlines was attempting to raise US$ 85 million in the first quarter of this year by listing between 40-45 percent of the SriLankan Catering shares.
The airline had been awaiting a Cabinet decision over the matter. 

The listing was sought as a way to retire a portion of the US$ 450 million in interest bearing debt the airline has accrued over the past 8 years.

SriLankan Catering, which produces in-flight meals to over a dozen airlines flying to Colombo, operates a transit hotel and a coffee shop in the Katunayake Airport, as well as a restaurant and a tea house in Colombo had a stated capital of around US$ 200 million at the beginning of 2016.
The company had said that it was also planning to start an outdoor catering operation.

The new regime had favoured the listing and divesting of state-owned companies, as the 2016 budget said that many would be listed this year. However, with the intervention of President Maithripala Sirisena, it appears that only loss-making state companies will be privatized. (CW)