Sri Lanka state textile firm to be revived

April 03, 2009 (LBO) - Lanka Salusala, a partly operational Sri Lankan state textile firm which is overstaffed and debt ridden, is to be closed down and re-started as a new business entity. Textile development minister Mahinda Rathnathilaka said the firm will be revived as there are many legal issues relating to its liquidation.

"We are looking to register it soon as a fully state-owned textile company," he said.


Salusala has 298 workers and they have not been paid for the last three months.

More than 90 percent of staff have agreed to accept a voluntary retirement scheme (VRS).


Rathnathilaka said Salusala hopes to raise funds for the VRS by selling its 22 perch property on prime property in the Colombo 3 ward of the capital.
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Salusala officials are in talks with the foreign employment bureau to sell it the property.

"We need 6.2 million rupees monthly to pay salaries and other emoluments. As the firm is not functioning properly we are unable to pay their salaries on time," Rathnathilaka said.

The government treasury has agreed to release 20 million rupees which will allow Salusala to pay the three month overdue salaries before the traditional new year ho

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