Emirates Buys Out Air Lanka Stake For $70 M

Sri Lanka said on Wednesday it had sold a 40 per cent stake and management in state carrier, Air Lanka, to Dubai's government-owned Emirates airline for $70 million.

The government has successfully concluded the Air Lanka restructuring programme. The move will enable Air Lanka to embark on a $550 million re-fleeting programme, an official statement said.

In Dubai, an Emirates spokesperson said that under the agreement, the airline would pay $70 million in two tranches.

While the first $45 million will be paid on signing, the balance will be paid two years later with no management fee.

Emirates will also manage the company on a day-to-day basis within the board-approved guidelines and parameters, it said.

 

Sri Lankan officials said Emirates had paid the government $10 million as dividend over and above the first tranche of $45 million.

The deal was signed on Monday by Emirates chairman Sheikh Ahmed bin Saeed al-Maktoum and a Sri Lankan treasury official.

This is the first time that Emirates has purchased equity in another carrier, and we are proud that the government of Sri Lanka has chosen us as Air Lanka's business partner, Sheikh Ahmed said.

Emirates would manage Air Lanka for 10 years. The deal includes ground handling and catering.

Air Lanka, which employs some 5,000 people, has debt of $308 million due to its purchases of its three Airbus A340 airliners, deputy secretary to treasury, P B Jayasundera, told the news conference.

Sheikh Ahmed said Air Lanka's four Tristars and two Airbus A320s would gradually be replaced with six new A330-200s, raising capacity by more than 70 per cent and cutting operation costs.