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Sri Lanka has revived the process of privatizing the state-run carrier that is saddled with at least $1 billion of debt, a year after talks with sole bidder TPG Capital collapsed following due diligence of the struggling airline.

The island nation’s finance ministry will seek preliminary bids for SriLankan Airlines Ltd. by September or October, Mano Tittawella, an adviser to the ministry, said in an interview late Monday. There has been “fairly serious” interest in the sale, and the government expects to be in talks with at least two parties by the first quarter of next year, he said.

SriLankan Airlines is competing with Gulf carriers like Etihad Airways PJSC and Emirates Airline for customers in the local market, and years of losses have prompted the government to look for a buyer and offer to absorb all the company’s debt. In the latest attempt that started in 2016, at least eight parties showed interest in a sale. Those included U.S. buyout firm Blackstone Group LP and TPG, Bloomberg News reported at the time.

Emirates held 44 percent of SriLankan Airlines until 2010, when the government bought the stake following the end of a 26-year civil war. The allure of buying into an airline in the tourism-dominated nation primarily lies in its proximity to India, the world’s fastest growing aviation market, where an emerging middle class is increasingly flying overseas for work and leisure.

The company’s accumulated losses stood at 141.1 billion Sri Lankan rupees ($879 million) as of March 2017, according to its annual report.

 

This article was written by Asantha Sirimanne and Anurag Kotoky from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: A SriLankan Airlines aircraft at Bandaranaike International Airport, north of the island nation's capital of Colombo. The government is selling the airline. Bloomberg