SriLankan finalizes five-year business plan, hopes to be viable in "foreseeable future"

SriLankan Airlines’ board of directors has considered some of the key recommendations made by consultants hired to set out a restructuring and turnaround plan for the airline and finalized a comprehensive plan to achieve this objective, shareholders of the company summoned for an EGM on April 30 have been told.

This includes the restructuring of the route network, a fleet plan to suit the network, evaluation of all costs/overheads with detailed measures to control expenditure, human resources required to implement the plan and the restructuring of debt.

The conversion of liabilities to the Ceylon Petroleum Corporation running into tens of billions of rupees to medium term supplier credit facilities together with relief on short term debt from state banks form an integral part of the plan, shareholders have been told.

"Further with the view to injecting much-needed cash to repay part of the debts, a sale of minority stakes in profitable subsidiaries/strategic business units – these include Sri Lankan Catering and ground handling companies – has been proposed," the directors have said.

"A series of cost reduction strategies which cover all areas of the company is already being implemented." They have said.

They said the management has already been strengthened with the appointment of a new CEO and Chief Technical Officer with further appointments to be made in the future.

"The restructuring plan if implemented in full envisages that the company will break even in three years," the directors have said.

The company has submitted the restructuring plan to the expert committee appointed by the president last January. A Commission of Inquiry too is currently examining the airline with many of its present and past employee testifying before it.

"The expert committee having evaluated the restructuring plan, has also submitted their recommendations at a policy level which will be considered by the GOSL and the company in its final restructuring."

They have concluded the circular saying that "the directors are of the view that the planned restructure and continual support of GOSL based on this plan will enable the transformation of SriLankan into a viable entity within the foreseeable future."

They have also said that a five-year business plan is being formulated by the management of the company under the guidance f the board of directors. This is at the finalization stage and sill supplement the restructure.

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