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Insurance Corporation divestiture this year

By Ravi Ladduwahetty and Uditha Kumarasinghe

The privatisation of the Sri Lanka Insurance Corporation Ltd (SLICL), said to be one of the biggest such exercises in the country, will be done before the end of the year.

Accordingly, a 90 percent equity stake of the SLICL will be sold to a strategic investor, thereby constituting one of the biggest stakes in the Government's privatisation agenda for 2002.

Public Enterprises Reforms Commission Director-General Deepal Gunaratne told the Daily News yesterday that the divestiture of the 90 per cent stake of SLICL will be on an all-or-nothing basis with the strategic investor also being offered the option of buying back the 10 per cent of the shares which will be gifted to employees.

Responding to a question as to how much the divestiture was worth, he said that neither the Government nor the financial advisors to the issue- Price WaterHouseCoopers had done an evaluation of SLICL and that they were waiting for the bids from potential investors on which the government's sale price will be based.

Asked why such a major issue was not listed in the Colombo Stock Exchange and divested through an Initial Public Offering (IPO), Gunaratne said that it was a Cabinet decision as the Government had various techniques of privatisation where each of them were taken on a case-by-case basis.

PERC has appointed the globally reputed firm of Chartered Accountants PriceWaterCoopers as the financial advisors to the issue. SLICL could be sold to either one company or a consortium, Mr. Gunaratne said.

Meanwhile, the All Island Field Officers Union attached to the Sri Lanka Insurance Corporation Ltd (SLICL) has unanimously decided to oppose the Government's decision to privatise the SLICL.

Union chairman A. Adhikari told the media on Monday they will get one million signatures from the public for a petition requesting the Government to withdraw this decision. They hope to hand over the petition to the Prime Minister. The signature campaign which commenced from the Fort Railway Station on Monday will be conducted islandwide, he said.

Mr.Adikari said that their trade union was not connected to any political party and is willing to cooperate with any Government. "So far we have no intention of going in for a picketing campaign. Our only intention is to submit facts to the Government regarding the inadvisability of privatising the SLICL which has a proud 40 year history." 

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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