• Debt includes international bonds amounting to $ 175 m: Aviation Minister
• Airline to be restructured, stake to be sold, management handed over 
• SriLankan has not defaulted on short-term loans: Chairman Pathirage

Minister of Ports, Shipping, and Aviation Nimal Siripala de Silva played down the recent revelations regarding SriLankan Airlines’ failure to settle short-term loan facilities obtained from the two State banks during 2016-’17, pointing out that the airline was burdened with debt to the tune of $ 1.2 billion.

The 2021 Annual Report of the Auditor General revealed that as of 31 March 2021, SriLankan Airlines was yet to settle the short-term loan facilities it had obtained from the two State banks amounting to $ 200 million during the year 2016/’17 (approximately Rs. 31.1 billion) and Rs. 29.4 billion during the year 2017/’18.

Speaking to The Sunday Morning Business, Minister de Silva stated that it was a well-established fact that SriLankan Airlines was a company indebted to the tune of $ 1.2 billion, which included international bonds (guaranteed by the Treasury) amounting to $ 175 million. 

“That’s why we are going to restructure SriLankan Airlines, sell a stake in the airline, and hand over management to another party,” he explained.

Responding to a query on whether SriLankan Airlines had defaulted on these short-term loan facilities, the Minister stated: “It may be paying the interest. Regardless, SriLankan is in debt.”

Speaking to The Sunday Morning Business, SriLankan Airlines Chairman Ashok Pathirage stressed that the airline had not defaulted on the said short-term loan facilities and had continuously serviced the interest payments.

He further stated: “These are not non-performing loans; all the loans have been serviced. There is no default. If we had defaulted, they would have had to write it off their books.” 

When The Sunday Morning Business reached out to the Chairman of the Bank of Ceylon, he declined to comment as he was not in a position to reveal any details relating to a customer of the bank.

The 2021 Annual Report of the Auditor General further revealed that SriLankan Airlines had recorded a loss of Rs. 45.2 billion during 2020/’21 and that the accumulated loss had been Rs. 371.7 billion.