SINGAPORE Oct 5 Private equity firm TPG and
fund company BlackRock Inc are among half a dozen firms
which have shown preliminary interest in a 49 percent stake in
loss-making SriLankan Airlines Ltd, people familiar with the
They said Sri Lanka is looking to sell the stake along with
management control in the restructuring national carrier as part
of its efforts to reduce support for state-owned firms and cut
In July, a unit of state-run National Savings Bank, the lead
manager overseeing SriLankan Airlines' revamp, invited offers
from strategic investors who would assume responsibility for
turning around the airline and its budget subsidiary Mihin
A senior Sri Lankan finance ministry official said TPG and
BlackRock were the two top international firms among the
bidders. He declined to be identified as the bids are still
BlackRock and TPG declined to comment. It was not
immediately clear who were the other bidders. Sources also said
it was too early in the process to estimate a potential deal
SriLankan Airlines was a profitable 10-year joint venture
with Emirates Airline until the pair split in 2008.
Mismanagement in the years since has left it with debt of around
$3.25 billion, Sri Lankan Prime Minister Ranil Wickremesinghe
"The government is looking at someone to solve the airline's
struggles," said one person familiar with the matter. The
person, who was not authorised to speak to the media, declined
to be identified.
SriLankan Airlines is due to give details of its
restructuring plan at a media event later on Wednesday.
The people said government is expected to shortlist parties
and pick a final bidder in the next couple of months, adding
that the government has indicated it would take on a substantial
portion of the debt owed by the airline.
The companies are expected to start due diligence after the
shortlist has been finalised.
SriLankan Airlines has attractive routes to India and
analysts have said potential investors could be drawn to the
prospect of turning around the carrier, which has about 21
leased Airbus planes.
Srilankan Airlines reported a net loss of 16.33 billion Sri
Lankan rupees ($112 million) for the year to March 31, narrower
than its 31.4 billion rupees a loss year earlier on lower oil
prices. It last made a profit in 2009, a year after Emirates
sold its stake.
($1 = 146.1800 Sri Lankan rupees)
(Reporting by Anshuman Daga and Shihar Aneez; Editing by Edwina