Local carrier TMA proposes to purchase Sri Lankan Airlines

Private airline Trans Maldivian Airways (TMA) in collaboration with a Singapore firm has proposed to purchase major shares of Sri Lanka’s national airline with an investment of USD 5 billion (MVR 77 billion).

The Sunday Times of Sri Lanka cited reliable sources that the joint venture Super Group Partners Company Limited founded by TMA and Singapore firm SATS received the highest points from the ten bidders that proposed to buy shares of Sri Lankan Airlines. The Super Group Partners have offered to buy 80 percent of the airline’s stakes and received total 68 points.

According to the Sunday Times, Super Group proposed to make an investment of USD 5 billion in Sri Lanka, to be paid in instalments within a decade. While USD 1 billion of the investment will cover Sri Lankan Airlines’ debts, the remaining are to be invested in aviation and related projects.

Mihaaru understands that TMA’s parental company, the Blackstone Group of the United States, is making the investment to purchase the airline’s shares. The largest investment firm in the world, Blackstone had purchased major stakes of Maldivian Air Taxi and TMA in February 2013 and merged the two to form TMA, thus making it the largest seaplane operator in the world.

In the face of debilitating debts and financial troubles, Sri Lankan Airlines had opened the bid to privatise the company until September 23 this year. Under its privatisation efforts, the company has also halted operations of its budget airline Mihin Lanka and put off purchasing new aircrafts.

The Sri Lankan government has tasked teams from state-run National Savings Bank (NSB) and the international audit firm KPMG to evaluate the bid proposals for the airlines. The teams have now forwarded their report to Sri Lanka’s Cabinet Committee on Economic Management for a final decision on the bid winner.

While Super Group has proposed to purchase 80 percent of Sri Lankan Airlines, the International Civil Aviation Organisation (ICAO)’s standards stipulate that a foreign company cannot hold over 45 percent shares of a country’s national airline. Thus, should Super Group win the bid, Sri Lankan Airlines will lose its status as the national carrier of Sri Lanka.