Seven state-owned enterprises to be divested

A State-Owned Enterprise Restructuring Unit (SRU) has been set up by the Government, under the Ministry of Finance, Economic Stabilization and National Policies, in an attempt to implement structural reforms to accelerate growth so that the country can emerge out of the current economic crisis. 

The decision was taken in view of the fact that the State-Owned Enterprise (SOE) sector has been a severe burden on the country’s economy for several years.

Accordingly, the Cabinet of Ministers has approved, in principle, the divestiture of various companies, including SriLankan Airlines, SriLankan Catering, Sri Lanka Telecom (SLT), Sri Lanka Insurance Corporation (SLIC), Canwill Holdings (Grand Hyatt Colombo), Hotel Developers Lanka (Hilton Hotel Colombo), Litro Gas Lanka, Litro Gas Terminals and Lanka Hospitals.

The SRU will appoint reputed, qualified and experienced consultancy firms and development financial institutions to provide transaction advisory services to assist with the divestitures, while the process of selecting such transaction advisors is due to commence shortly.

The transaction advisors will, inter-alia, assist the SRU with sell-side due diligence, valuation, data room creation, transaction strategy and marketing of the entities to be divested.

The divestiture program will be carried out by the SRU in a transparent and credible manner and investor selection will commence with an EOI / RFP process to be published in the local and international press.

Issuing a statement in this regard, the Finance Ministry noted that these reforms are expected to contribute towards higher economic productivity by reducing market distortions, increasing organizational efficiency and improving the quality of service to the public.