Daily Archives: September 12, 2006
- Two leaders engage in dialogue
- SLFP to nominate 5-member team today
- UNP to follow suit
- Minority parties hail meeting
Opposition Leader Ranil Wickremesinghe yesterday met President Mahinda Rajapaksa at Temple Trees to discuss the current political situation in the country. UNP Deputy Leader Karu Jayasuriya and SLFP General Secretary Maithripala Sirisena also participated at the meeting. Pic by Chandana Perera
The much-looked forward to talks between President Mahinda Rajapaksa and UNP leader Ranil Wickremesinghe bore fruitful results with both parties citing it as a positive step for a bi-partisan approach in reaching consensus on the grave problems facing the country today.
The meeting which lasted for nearly two hours with emphasis being focused on the need to start bi-partisan talks immediately touched upon peace issues while the issue of national government did not surface. The President who was associated with SLFP General Secretary Maithripala Sirisena reiterated his commitment to peace.
Mr. Wickremesinghe was joined by his deputy Karu Jayasuriya.
Highly placed political sources told the Daily Mirror last night that the SLFP would appoint its 5-member team today to carry forward the bi partisan approach.
Mr. Wickremesinghe asked for another round of talks after the President returns from the UN to get things clear before appointing the UNP delegation.
Mr. Rajapaksa said these negotiations should be coordinated at parliamentary level instead of the executive level.
Meanwhile, several political parties welcomed the talks between the government and the UNP and stressed the need for a fruitful outcome aimed at solving the national issue.
The TNA said any national government between the two major political parties would not serve the intended purpose unless there is an agreement to solve the ethnic conflict based on a federal model.
TNA MP Suresh Premachandran they would welcome such a consensus in the main political stream if there is a commitment to solve the problem through dialogue based on a federal model.
He said any solution based on the unitary character was not acceptable to Tamils.
The SLMC also welcomed yesterday’s talks between President Rajapaksa and Mr. Wickremesinghe.
SLMC General Secretary Hasan Ali said the party also welcomed the idea of a national government. He said they should also consult minority parties since the national issue has affected the minority.
The Jathika Hela Urumaya yesterday said it would support any move by the government in forming a national government or reaching a common programme to defeat terrorism, to ensure the country’s unitary state and sovereignty, to develop the economy and to reform the constitution so that all communities enjoyed equal rights.
Commenting on the government-UNP talks JHU Media Secretary Nishantha Sri Warnasinghe however said if the talks were genuinely aimed at forming a national government to resolve the current issue, the government should negotiate and get the involvement of all the parties representing Parliament.
The JVP declined to comment on the matter.
[By Kelum Bandara, Yohan Perera and Gagani Weerakoon via... Daily Mirror]
Fitch Ratings Lanka yesterday assigned a National senior unsecured rating of ‘AAA(lka)’ to John Keells Holdings Limited’s ("JKH") up to LKR2.0 billion notes issue. At the same time, the agency affirmed JKH’s National Long-term rating of ‘AAA(lka)’. The Outlook on the ratings is Stable.
The net proceeds of the notes will be used to refinance JKH’s short-term debt. At the end of the first quarter of FY07, the company’s short-term debt was at LKR7.4bn (78% of total debt) after funding a number of recent investments through available shortterm facilities from banks.
The ratings take into consideration JKH’s operational diversity, majority market shares enjoyed in a number of business operations and robust cash generative earnings. However, Fitch notes that a large share of the cash generation is derived from a few of its business units, namely the sale of marine fuels, port terminal operations, property development and its city hotels. The operating results of JKH’s hotels and resorts in Sri Lanka are still depressed owing to the increase in hostilities between the Tamil Tiger rebels and the Government of Sri Lanka. However, the two resorts that it acquired recently and another which is under construction in Maldives, should enable JKH’s leisure division to report improved earnings and operating fund flows from FY08. This should offset the possibility of a continued weakness in the company’s tourism related operations as a result of a further deterioration of the security situation in Sri Lanka. The agency also expects JKH to generate strong fund flows from its on-going property development projects through FY09.
The company recently acquired lease rights to two resorts in the Maldives at a cost of USD34 million. The leisure division of JKH is expected to invest over LKR2.4bn in FY07, of which a majority is slated for the resort that is being constructed in the Maldives. Other large capex items will include the construction of a new bottling plant and a business process outsourcing facility in India. The agency notes that the investments required in the property development business division is high, but will be adequately supported by the installments due from buyers of the apartments.
Fitch’s key rating concerns are JKH’s heavy reliance on the marine fuel sales and port terminal handling operations for its cash generation. The security threat to the Port of Colombo has the potential to seriously damage the operating results of the division and dent the overall financial profile of JKH. However, the agency notes that in the past, general security threats to economic targets have had limited impact on the port related businesses of JKH, which is partly owing to some alleviating measure taken by the Government of Sri Lanka.
JKH in the past has maintained a strong financial profile and a relatively conservative capital structure. Although its leverage (measured by adjusted debt net of cash to Operating EBITDAR) has increased to 1.3x at Q107, it is still acceptable for its current ratings.
In the absence of any large debt financed investments, Fitch expects JKH’s credit metrics to improve over the medium term to a more comfortable level for its ratings. The agency also expects the management of the company to fund large investments in the future through an appropriate mix of debt and equity to maintain the quality of its balance sheet.
JKH’s debt maturity profile is currently heavily skewed towards the short term. However, this should improve with the replacement of short-term facilities using the proceeds from the notes issue and repayment of debt using the cash inflows from business operations. JKH had cash reserves of LKR5.5bn and committed-unutilised credit facilities of LKR11.0bn at Q107. The agency also notes that JKH has good access to the capital markets.
JKH is one of Sri Lanka’s largest and most diversified corporates with interests in port terminal operations, sale of marine fuels, shipping and cargo logistics operations, resort hotels and other tourism related operations, property development, manufacturing and distribution of food and beverage products, operating of supermarkets, financial services and information technology. The company’s sales and EBITDA totaled LKR29.9bn and LKR4.1bn in FY06, respectively.
Note to editors: Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(lka)’ for National ratings in Sri Lanka. Specific letter grades are not therefore insernationally comparable. via… Daily Mirror
Commonwealth Secretary General Don Mckinnon (centre) addressing journalists ahead of the Commonwealth Finance Ministers Meeting today. Commonwealth Deputy Secretary General Ransford Smith (left) and Minister Dr. Sarath Amunugama are also present. Pic. by Indraratne Balasuriya.
Poorer nations look for debt relief and higher aid; stimulating higher growth and managing global shocks overall focus
By Sunimalee Dias
The Finance Ministers will be required to deliver on the debt relief and higher aid for member countries who are developing and poor during deliberations at the Commonwealth Finance Ministers Meeting starting in Colombo from today.
The conduct of the developed nations and donor agencies over the years will be assessed and their impact discussed in the run-up to the IMF and World Bank meet later this week, Commonwealth Secretary General Don Mckinnon said yesterday.
Assessment of debt write-offs, doubling aid and their strict implementation key impediments to growth will be high on the agenda.
With the participation of a Prime Minister, 16 Foreign Ministers, 12 other ministers, 18 Secretaries, 8 Governors of Reserve Banks and 101 senior government administration officials, the main focus would be the upcoming meet where these countries’ issues could be addressed and endorsed.
“One of the important things of the meeting is to bring together commonwealth countries at the ministerial level and discuss issues pertaining to them,” he said.
Following this he is expected to push forward for the full implementation of these issues and obtain endorsement as well on these.
“Finance Ministers should remind the donor agencies and developed nations that they need to stick with the piece of the promise” made to them during these rounds of discussions in the next three days, the secretary General asserted.
Since 2005 the debt write-off process has been set off. However, concerns have been expressed with regard to their full implementation by the donor agencies and countries, the secretary general asserted.
The G8 nations agreed to write off the debts of the world’s poorest countries which was welcomed by the Commonwealth states which had been advocating root and branch debt relief for highly indebted poor countries for 20-odd years.
However, today’s concerns are of a different nature with the Secretary General pointing out, “We wish to see greater implementation of significant debt write off and doubling aid levels.”
The doubling of aid is another pertinent issue that would be the focus of attention by the member states.
“We do have to be concerned about the Geneva attitude for the Doha Round,” Mckinnon said noting the call made by the G8 nations for a return to the Doha roundtable conference by the developing nations.
Other related issues would be those pertaining to the small states which he said were permanently vulnerable and it was important to address the issues of employment opportunities, economic opportunities, options and impediments and how to reduce the latter.
The main impediment is oil prices which is currently affecting the world and which would be taken up as it would
be of significant importance to the Commonwealth states and of interest.
“We are expecting a positive meeting and we have reason to believe it will go smoothly, the Secretary-General said hours ahead of the meeting.
While being in the process of the budgetary cycle these meetings are expected to assist the Finance Ministry in their preparation in terms of the detailed loan agreements to be pursued with the IMF and World Bank, Public Administration and Home
Affairs Minister Dr. Sarath Amunugama told journalists.
Three groups of meetings namely: Senior Officials Meeting, the formal opening ceremony and the Ministerial meeting would be held while the Commonwealth Business Council meeting organized by the BOI would be held on the sidelines of the meet.
This would provide an opportunity for Sri Lanka to showcase their business opportunities, he said.
via… Daily Mirror