A US equity firm that bid to buy a stake in Sri Lanka’s loss-making national airline has pulled its offer, officials said Saturday as the carrier scrambled for a new partner.
TPG, a San Francisco-based private equity firm, has withdrawn its bid for a 49 percent stake in Sri Lankan, dashing hopes of a quick revival of the airline.
“After completing the due diligence, regrettably TPG have informed us they will not pursue a potential investment in Sri Lankan airlines,” Sri Lankan Chairman Ajith Dias said in a memo to his staff.
“It is their opinion that allocating the human and financial resources to make the airline profitable will not realize sufficient returns compared to the many other investment opportunities that are available to them,” Dias said.
There was no immediate comment from TPG.
Sri Lanka’s flag carrier has accumulated debts and losses of over $2 billion.
Talks are now underway with Dubai’s Emirates, which had managed and owned a minority stake in Sri Lankan for a decade till 2008 and was interested in a new management deal, official sources said.
There was no immediate comment from Emirates.
Its previous contract was terminated nine years ago and the CEO it appointed was asked to leave the country by then president Mahinda Rajapaksa.
Rajapaksa had refused to bump fare-paying passengers to make way for his family members who were returning home from London.
Sri Lankan was profitable under the Emirates management but started going downhill after Rajapaksa appointed his brother-in-law, Nishantha Wickramasinghe, who had no airline experience, to head the company.
He is now under investigation for corruption.
Late last year, in an effort to cut costs, Sri Lankan canceled the previous government’s order to lease four brand new Airbus A350-900 long-haul aircraft after paying a penalty of $115 million to aircraft leasing giant AerCap.
A separate order for four Airbus A350-900 planes will also be canceled, the government has said.
Rajapaksa had ordered all eight planes as part of a $2.3-billion re-fleeting program for the airline, which is now being investigated for corruption.

Source: Arab News