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Wed 7 Jul 2010 02:47 PM

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Sri Lanka buys Emirates' stake in SriLankan Airlines

SL gov't buys the 44% through Bank of Ceylon, the island’s biggest state-owned lender.

Sri Lanka buys Emirates' stake in SriLankan Airlines
STAKE TAKE: Emirates initially bought 40 percent of the then Air Lanka in 1998 for $70m.(Getty Images)

Sri Lanka bought Emirates Airline’s stake in SriLankan Airlines for $53 million, about a third of the price that Dubai-based Emirates valued the stake at two years ago.

The government acquired the 44 percent stake through Bank of Ceylon, the island’s biggest state-owned lender, Treasury Secretary PB Jayasundera said in the capital Colombo today, without elaboration. The government previously held 51 percent of the flag carrier, with the rest owned by staff.

The deal may help Sri Lanka boost tourism following the end of a 26-year civil war and position the island to benefit from rising travel in India, the world’s second-most populous country. Emirates ended a 10-year management agreement with SriLankan in 2008 when it valued its stake at $150 million.

Emirates initially bought 40 percent of the then Air Lanka in 1998 for $70 million. The carrier didn’t renew the management accord because the government wanted greater day-to-day control over operations, Emirates President Tim Clark said at the time.

The airline confirmed today in a statement that it completed the share sale to the government of Sri Lanka.

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