Added by Gary Dunn on November 4, 2010
The government purchased royal Dutch Shell’s Sri Lankan subsidiary for $63 million.
This was done as a part of the re-nationalization efforts of the island country. The company is now fully owned by the government with 100 per cent stake purchase. The seller had purchased a 51 per cent stake for $37 million, back in 1996.
The company now owned by the Sri Lankan government will carry out all activities from import to distribution of fuel. This has been indicated by the government, which also offered that the entity shall have a new name and will be called Litro Gas.
The current administration in Sri Lanka has undone some privatization deals done in the past. It has followed a strictly anti privatization rule since 2005 with deference to trade unions, Marxists and left based political parties. .
Other organizations that have faced the brunt of government action include the national air carrier, the national port and other entities.
The national carrier involved a stake held by Dubai Emirates and this was purchased by the government for $55 million. The government has also won court action which saw litigants pleading the judiciary to declare the privatization move as illegal.
The courts upheld the decision and this further gave impetus to the privatization move.