Sale of seven SOEs: No unsolicited bids

The Government will not entertain any unsolicited bids for the seven businesses that it listed for restructuring this week while a decision on what shareholding--if any--the State will hold in them will be made only after valuations are completed, a top official said.

“A decision on whether there will be a 100 percent divestment or whether the State will retain a stake will be taken once the sell-side due diligence, including future projections, and the work of transaction advisers are done,” State-Owned Enterprises (SoEs) Restructuring Unit (SRU) Chief Suresh Shah said.

The SoEs first in line for restructuring are SriLankan Airlines Ltd including SriLanka Catering Ltd; Sri Lanka Telecom PLC; Sri Lanka Insurance Corporation Ltd; Canwill Holdings (Pvt) Ltd (Grand Hyatt Colombo); Hotel Developments Lanka Ltd (Hilton Hotel Colombo); Litro Gas Lanka Ltd including Litro Gas Terminals (Pvt) Ltd; and Lanka Hospitals Corporation PLC.

Meanwhile, Cabinet approval is expected to be sought shortly to wind up Selendiva Investments Ltd--the Treasury-owned property development firm floated by the previous administration to turn around underused State assets.

The company was incorporated in 2020. Subsequently, a subsidiary called Selendiva Leisure Investments Ltd was set up under which it was planned to consolidate the Colombo Hilton, Grand Hyatt Colombo and the Grand Oriental Hotel.

But this was hampered by a Fundamental Rights petition filed in 2021 seeking an order to prevent the Treasury Secretary from taking any steps to sell, lease or alienate State properties. When the case came up on March 8 this year, the Supreme Court was notified that Selendiva would be dissolved once the Cabinet sanctioned the move.

Before the Government change, Selendiva even advertised for investment brokers and hired a transaction adviser to help find backers for its projects. It also called for expressions of interest from investors for the development of the GOH and the York building in Colombo Fort.

Now, the SRU will advertise afresh for consultancy firms and/or development finance institutions to provide transaction advisory services to assist with the divestitures, a statement said: “The transaction advisers will, inter alia, assist the SRU with sellside due diligence, valuation, data room creation, transaction strategy and marketing of the entities to be divested.”

Advertisements for consultants and, later, investors would be published locally and internationally, Mr Shah said, predicting that the restructuring will take time.

“We are focusing on a proper system, giving priority to doing the right thing rather than doing things quickly,” he explained. The SRU will handle the process under the supervision of the Ministry of Finance.