Texas Pacific Group (TPG) has pulled out from nearly 10 month-long discussions with the Sri Lankan government over picking up a stake in the country’s debt-ridden national carrier, forcing the authorities to seek other options.
The decision was confirmed on Monday after the US-based private equity firm completed due diligence.
TPG, local firm Peace Air and a Maldivian company were shortlisted for a 49 per cent stake in SriLankan Airlines after the government called for bids last July.
“We have made some preliminary approaches to some airlines for a kind of partnership, though there are no negotiations as yet,” said Sri Lanka’s deputy minister of public enterprise development Eran Wickramaratne, who added that Emirates were among those approached.
SriLankan has been scouting for a partner in the past year as debt accumulated due to a combination of uneconomic routes, prior mismanagement and competition from the Middle East carriers.
Last week, the airline announced that net group loss (before finance and one-off charges) for the financial year ending March 31, 2017 had risen to US$15.1 million from US$3.1 million loss in the previous year.
To cut losses, the airline last year stopped flying to Paris, Rome and Frankfurt but strengthened its regional services particularly to India, where SriLankan operates the most number of flights by any foreign operator.
