CPC warns SriLankan of supply cut

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By 2018-01-14

By Zohara Ghaffoor

According to the Ceylon Petroleum Corporation (CPC), SriLankan Airlines has agreed to stay within CPC's credit limit of Rs 13 billion, which they have so far exceeded by Rs 607 million, after a letter of warning was sent by CPC Chairman, Dammika Ranatunga.
Speaking to Ceylon FT, the Chairman said a warning letter was sent to the Airline informing that fuel supplies will be cut off immediately if payments were not made by 11 January 2018.

He said immediately after this letter and a meeting with the Chief Financial Officer of the Airline, it has agreed to stick to CPC's credit limit and paid Rs 607 million on the due date. This amount was only 4% of the total debt owed to the CPC by SriLankan.
The Chairman accused Sri Lankan of deliberately postponing the debt repayment. "They have the money and funds to pay, however they prioritize their foreign counterparts, when they pump fuel overseas. This is because they don't have the credit advantage CPC provides them with. Hence they squeeze us with this debt burden."

However, he said CPC will continue to pressurize Sri Lankan to pay up and he said he was not concerned if the matter was reported to higher authorities as it was a part of the CPC's responsibility to manage its credit.
Ranatunga however said as of now the total debt from SriLankan remains at Rs 13 billion.
Speaking of the debt repayment of Rs. 40 billion to be received by the Ceylon Electricity Board, he said, "We will deal with that on a separate level".

According to the Ministry of Finance, SriLankan Airlines for the first eight months of 2017 recorded......Profit Before Tax (PBT) of Rs 5.9 billion and was estimated to close at Rs 9.4 billion. CPC recorded a PBT of Rs 62.7 billion in the first eight months of 2017 and was estimated to close at Rs 10.6 billion by the end 2017. CEB recorded a colossal loss of Rs 21.9 billion in the first eight months of 2017.

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