The Cabinet of Ministers has granted approval for the procurement of transaction advisory services to facilitate the divestment of seven state-owned enterprises in Sri Lanka, marking a significant step towards state-owned enterprise reform.
The Ministry of Finance has stated that this decision aligns with the government’s policy directive and emphasizes the importance of ensuring effective and transparent divestment processes for these key entities.
To oversee the divestiture process, the Cabinet approved the appointment of the International Finance Corporation (IFC), a member of the World Bank Group, as the transaction advisor for three state-owned enterprises: Sri Lankan Airlines Limited, Lanka Hospitals Corporation PLC, and Sri Lanka Telecom PLC.
For the remaining four entities – Sri Lanka Insurance Corporation Ltd (SLIC), Hotel Developers Lanka Ltd (Hilton), Canwill Holdings (Pvt) Ltd (Hyatt), and Litro Gas (Pvt) Ltd (including Litro Gas Terminals) – the appointment of advisors was carried out through a competitive bidding process, adhering to the government’s Consultant Procurement Guidelines. Both local and international advisors submitted proposals, which were evaluated by a Special Cabinet Appointed Consultants Procurement Committee.
Based on the recommendations of the committee, the transaction advisors for the four entities have been appointed as follows: Deloitte Touche Tohmatsu India (Deloitte India) for Litro Gas (Pvt) Ltd and Canwill Holdings (Pvt) Ltd, Colliers International Consultancy & Valuation (Singapore) Ltd and Platinum Advisors for Hotel Developers Lanka Ltd, and Alvarez & Marsal Middle East LTD and Capital Alliance Partners LTD for Sri Lanka Insurance Corporation Ltd (SLIC).
The appointment of these transaction advisors was approved by the Cabinet of Ministers during a meeting on July 10th. Agreements pertaining to these appointments will be finalized soon, marking the start of the next phase of the divestiture process, which includes engaging with potential investors.
In an effort to uphold transparency, the government plans to invite prospective investors to express their interest in the divestiture process. Advertisements will be published in both local and international press to facilitate this. Shortlisted investors will be granted access to data rooms containing relevant information necessary for comprehensive due diligence.
Following this stage, the prospective investors will be requested to submit technical and financial proposals as part of the Request for Proposals (RFP) process.
The divestment of these state-owned enterprises is expected to contribute significantly towards sustainable economic growth and foster a more competitive economy while safeguarding the interests of the citizens of Sri Lanka. This move reflects the government’s commitment to driving positive change in the country’s business landscape.