AMN
Sri Lanka’s Ministry of Finance has called for expressions of interest from consultancy firms with respect to the divestiture of its state-owned enterprises. The State-owned Enterprise Restructuring Unit has today issued advertisements seeking consultancy firms interested in providing advisory services for the divestiture of stakes in four state-owned enterprises. These enterprises are Sri Lanka Insurance Corporation, Litro Gas Lanka, Hotel Developers Lanka and Canwill Holdings. The firms have been requested to submit their expression of interest with respect to the enterprises before 27th of April.
The Quality and Cost Based Selection method of the Government’s Consultant Procurement Guideline will be used to select transaction advisors. Meanwhile, the Ministry is in the process of negotiating with the International Finance Corporation, a member of the World Bank Group, to seek its services as a transaction advisor for the divestiture of the government’s stakes in three other SOEs. The enterprises under consideration are Sri Lankan Airlines, Sri Lanka Telecom, and Lanka Hospital Corporation.
Once selected, the transaction advisors will perform functions like sell-side due diligence, valuation, data room creation, transaction strategy, and marketing of the entities to be divested. The Ministry has stated that the divestitures will be carried out in a transparent and credible manner, following an EOI/RFP process which will be published in the local and international press. The Ministry added that unsolicited proposals will not be entertained.
Sri Lankan government is in the process of restructuring SOEs as the island nation is in the process of recovering from its worst ever economic crisis since its independence. Major SOEs, which totally number 52, hold a public debt equivalent to 12 percent of the GDP as of June 2022.