Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Moody’s Says Sri Lanka Bill on Private Assets to Fan Uncertainty

Nov. 14 (Bloomberg) -- Sri Lanka’s move to introduce a bill that empowers the government to seize assets of private companies would increase “investor uncertainty” and is “credit negative,” Moody’s Investors Service said.

The new law gives the government the power to acquire one holding company and 36 assets held by private companies that have at some point received aid or land from the state, Moody’s said in an e-mailed statement. The government has stated that the bill aims to seize assets that are either underutilized, or idle or contravened public interest, Moody’s said.

“Despite authorities’ statement that this is a one-off move and that further expropriation will not occur, the measure may undermine the predictability of future policies and increase investor uncertainty, which would make it credit negative for Sri Lanka,” Moody’s said.

The government will have the power to acquire assets of companies including Pelwatte Sugar Industries Plc, a subsidiary of Sri Lanka’s biggest liquor maker, and Hotel Developers Lanka Plc., which owns the Hilton Colombo, according to the bill.

“It is unclear, however, whether the assets will be managed by the state or resold to other investors, and how performance will be revived,” according to the statement. “The use of the fast-track procedure, which we believe limits public scrutiny, largely reflects the tendencies of the current government to exert strong and direct influence over the economy.”

Moody’s has a B1 credit rating on Sri Lanka’s foreign-currency debt, which is four levels below investment grade. In July, Moody’s raised the nation’s rating outlook to positive.

Parliament Approval

The act, called the Revival of Underperforming Enterprises and Underutilized Assets bill, was presented in parliament on Nov. 8 by Prime Minister D.M. Jayaratne and passed on Nov. 9.

Sri Lanka’s Supreme Court last week ruled that the bill was not inconsistent with the nation’s constitution, Moody’s said.

“Maintaining investor confidence is key to Sri Lanka’s ability to continue to collect the peace dividend,” Moody’s said. “But an unintended consequence of this expropriation measure may be that it casts a cloud over the investment climate.”

To contact the reporter on this story: Anusha Ondaatjie in Colombo at

To contact the editor responsible for this story: Hari Govind at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.