Sri Lanka’s CPC Negotiates with Goldman Sachs for $1bn Long Tterm Financing for Petroleum

10th January 2012, www.news360.lk, By Prasanna C Rodrigo

Sri Lanka has started negotiations with Global Investment Bank Goldman Sachs to obtain a US$ 1 billion loan facility to help finance the country’s state run petroleum utility CPC.

According to highly credible government sources, a delegation from the Goldman Sachs has arrived in the country during this week and held a round of discussions with the Sri Lankan Government.

The delegation has met officials of both the Central Bank and the Ministry of Petroleum and Petroleum Resources Development.

They have also held a meeting with the country’s Petroleum Minister Susil Premajayantha.

The meetings have taken place yesterday.

“The deal will go through within weeks or months” said an official who is familiar with the workings of the deal.

Another Official who has taken part in the meeting said that the terms and conditions of the financing facility is yet to be decided.

Governor of the Central Bank, Ajith Nivard Cabraal, last week announced that Sri Lanka will seek US$ 1 billion during this year as a means of a special long term financing for Petroleum.

The money, once received is expected to be used for petroleum payments.

Sri Lanka’s Petroleum Import bill during the year 2011 is estimated to have reached a sum of US$ 4.5 billion, compared to US$ 3 billion spent on 2010.

Sri Lanka to Sell Stakes in State Firms through Public Share Issues

17th October 2010, www.sundaytimes.lkBy Duruthu Edirimuni Chandrasekera

The government is looking to sell stakes in state-owned entities in the near future through public share issues, according to officials. They said that after SriLankan Airlines Catering and Shell Gas goes public, Ceylon Petroleum Corporation (CPC), Ceylon Electricity Board (CEB), SriLankan Airlines, ITN and Sri Lanka Insurance Corporation (SLIC) will follow suit.

Media Minister Keheliya Rambukwella also confirmed this and told the Business Times that the government is favourably looking at selling stakes in these institutions. “The time is right (to list) and all indicators are pointing favourably at listing.

The concept of the government at present is to ‘give to the people’ so that they will have a say,” he said, adding that such public participation in these entities will facilitate the people to voice their opinions (at Annual General Meetings).

A team of experts from the Treasury, the Central Bank and some financial consultants are working on the modalities of listing these entities. “They are planning the strategies taking into consideration the mood in the share market and the interest of the people,” he said.

Highly placed sources told the Business Times that many of these entities are debt ridden and that the government is discussing to list about 15 to 20% of each entity at the Colombo Stock Exchange to initially retire their debts and then streamline these entities.

“Listing brings in better corporate governance and better performance to these entities,” one source said. Minister Rambukwella added that the government is constantly realigning its strategy and will infuse private sector participation while keeping the people’s interest at heart when going for Initial Public Offerings.

Nishantha Wickremasinghe, Chairman SriLankan Airlines (SLA) told the Business Times that SriLankan Airlines is planning to divest a part of its fully owned catering unit through a public listing to raise around Rs 60 million. He said that SLA is planning to separate its MRO Department – Maintenance, Repairs and Overhaul - into another subsidiary. “We will form a separate firm at Mattala, Hambantota with a larger engineering facility,” he added, noting that this company too will be listed at a later date.

He said that SLA is also planning an aeronautical engineering academy to be formed in the same area to train technicians. “We can attract international students with such a facility and also retain local engineering students,” he noted. He added that this entity too will be listed in time to come. “After this we’ll consider an SLA listing,” he added.