Emirates Airline has sold its stake in SriLankan Airlines for US$53 million, about a third of the price that Dubai-based Emirates valued the stake at two years ago.
The Sri Lankan government acquired the 44 percent stake through Bank of Ceylon, the island’s biggest state-owned lender, finance ministry secretary P.B. Jayasundera said.
The government previously held 51 percent of the flag carrier, with the rest owned by staff.
Emirates ended a 10-year management agreement with SriLankan in 2008 when it valued its stake at $150 million, Bloomberg reported.
Emirates initially bought 40 percent of the then Air Lanka in 1998 for $70 million, but didn’t renew the management accord.
The relationship between Emirates and the Sri Lankan government went downhill after the former CEO of Sri Lankan Airlines, Peter Hill, refused to bump passengers off a flight to make way for the president of Sri Lanka.
The Sri Lankan government, citing the airline’s refusal to clear 35 seats for president Mahinda Rajapaksa and his entourage on a flight from London via the Maldives to Colombo in December 2007, revoked Hill’s work permit.
At the time, local media said that the government wanted a bigger management role and believed that the existing contract was tilted in favour of Emirates financially.
