Colombo, Dec 27 (newsin.asia) – The Sri Lankan government has successfully negotiated a long-term credit package of 200 million US dollars with the Credit Suisse Bank in order to keep its debt ridden national airline afloat, the local Daily Mirror reported Wednesday.
The cabinet which met earlier this week has approved to obtain the funds. State Minister Lakshman Yapa Abeyardena said that out of the 200 million US dollars, 50 million US dollars was obtained as a short term loan facility.
Prime Minister Ranil Wickremesinghe said last year that Sri Lanka’s national carrier, Sri Lankan Airlines has been facing a massive debt of 3 billion US dollars and was a ‘landmine’ for the country’s economy.
Wickremesinghe blamed the previous administration for mismanaging the national airline which led to colossal losses.
He said the government was in search of an international investor to manage the airline on a Public, Private partnership.
However with this loan obtained by the Credit Suisse Bank this week, Minister Yapa said this was expected to strengthen the government’s guarantee for the ongoing discussions with several investors to run SriLankan Airlines.
Yapa said the government did not intend to liquidate the national carrier under any circumstances but the massive debts stood as an obstacle to the successful conclusion of negotiations with private investors.
The Sri Lankan government, led by President Maithripala Sirisena after being elected to office in 2015, ordered a criminal investigation into alleged corruption at the national airline during the previous regime, saying that it involved ‘billions of dollars’.
As a result of its mounting debts, Sri Lankan Airlines suspended its flights to Paris and Frankfurt from October and November last year, stating that the government had made it clear that it will no longer fund continuing losses.
The Indian Sub-continent, the Middle East and the Far East have remained SriLankan’s focal markets, where the Airline continues to explore its potential for expansion.