Dubai: Emirates has sold its 44 per cent share in SriLankan Airlines for $53 million (Dh194 million), suffering a loss of almost $20 million on the original purchase value, and $100 million on the value evaluated two years ago.
On Wednesday, Sri Lankan Treasury Secretary P.B. Jayasundera was quoted in Colombo as saying that the government acquired Emirates' stake through Bank of Ceylon, the island's biggest state-owned lender.
"Payment has been made and shares are held by Bank of Ceylon," Jayasundera said. "We are looking for a strategic partner or somebody from the government to take that stake and maintain the commercial character of SriLankan," he said.
"All shares sold to Emirates have been acquired," SriLankan Airlines chairman Nishantha Wickramaisinghe said.
An Emirates spokesperson said, "Emirates confirms that the sale of its shares in SriLankan Airlines to the Government of Sri Lanka has now been completed."
Earlier this year, the Sri Lankan government said it is looking to increase its share from the majority stake it already held.
Emirates bought the stake 12 years ago and also the 10-year management contract as part of the deal. Under its management, the airline bought six Airbus A330-200s and upgraded its A340 fleet into a two-class configuration of business and economy. Close to the end of the contract, the Sri Lankan government cancelled the work permit of the airline's chief executive Peter Hill in a dispute involving seats for President Mahinda Rajapakse on a London-Colombo flight.
The contract was not renewed as the government sought greater control of the airline's day-to-day business, Emirates said. However, it held on to the stake, waiting for the right price.
In 2009 the airline finally broke even after suffering from the global downturn in air travel, during which it was hit by a loss of Rs10 billion (Dh323.9 million). In recent years, the airline has been hit by terror attacks that destroyed four aircraft and damaged two others, costing it half its fleet.
Tourist arrivals in Sri Lanka have increased since June last year, a month after the government defeated the Liberation Tigers of Tamil Eelam. That's helped the company to recoup losses and consider expanding its fleet.
While the government controlled the running of the airline, it added two new Airbus A320s in the year to March and acquired a third last year.