An entity with close ties to AirAsia (AK, Kuala Lumpur International) is among six entities to have their Request for Qualification (RfQ) to bid for SriLankan Airlines (UL, Colombo International) accepted by Sri Lanka's State Owned Enterprises Restructuring Unit (SRU), an agency of the country's Ministry of Finance. The Sri Lankan government owns 99.52% of SriLankan Airlines but is in the process of selling a majority stake.
Following the expiration of an April 22, 2024, RfQ submission deadline, the SRU released a statement naming an entity with links to the LCC, along with FitsAir (8D, Colombo International), Dharshaan Elite Investment Holding Ltd., Sherisha Technologies Ltd., Hayleys PLC, and Treasure Republic Guardians Ltd as lodging RfQs and progressing to the next stage of the selection process.
AirAsia Consulting Sdn. Bhd., the consulting arm of AirAsia Aviation Group, is the only entity with ties to a major airline to submit an RfQ. Privately owned FitsAir is a small Sri Lankan LCC with three A320-200s and flights to four airports. Hayleys PLC is an established Sri Lankan conglomerate with interests across multiple industrial sectors, including aviation equipment and ground handling services.
Sri Lankan entities Treasure Republic Guardians Limited and Dharshaan Elite Investment Holding (Pvt) Ltd have also lodged RfQs, as has India's Sherisha Technologies Private Limited. The two Sri Lankan entities appear to be recently established investment vehicles, while the longer-established Sherisha appears to specialise in small-scale renewable energy solutions and allied software packages. None have any known aviation industry experience.
Colombo issued its callout to potential investors in SriLankan Airlines in October 2023. Since then, multiple news reports and a government minister suggested several high-profile entities, including Adani Group, Tata Sons, Emirates, and Etihad Airways had all submitted or were considering submitting RfQs. However, none did.
Participating in the RfQ process does not guarantee an entity will be allowed to bid for SriLankan Airlines. In its statement, the SRU said they will evaluate the RfQs per the Special Guidelines on Divestiture of State-Owned Enterprises approved by the Cabinet of Ministers in July 2023, with potential investors needing to satisfy certain technical, legal, and financial requirements.
Separately, The Financial Times has published details about the amount and nature of SriLankan Airlines' debt the government will take on. The newspaper says that LKR100 billion rupees (USD332.6 million) will be excised from the airline's balance sheet and become the government's responsibility. However, a USD175 million five-year international bond backed by a sovereign guarantee and due for settlement in June 2024 will remain on the carrier's books. The report notes the government will also pocket the proceeds from an arbitration case filed against Airbus, should that case go SriLankan's way.
The government hopes to conclude the SriLankan Airlines divesture process by September 2024.
