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Sri Lanka buys back gas business from Shell for $63 mln

[Reuters, Wednesday, 3 November 2010 11:10 No Comment]

Sri Lanka on Wednesday completed its buyback of the majority stake in Royal Dutch Shell’s (RDSa.L) local arm Shell Gas Lanka’s for $63 million as a part of its wider policy of re-nationalisation.

With Wednesday’s repurchase, the Indian ocean island nation now has 100 percent ownership of the company. Shell had bought the government’s 51 percent stake in the Colombo Gas Company in 1996 for $37 million.

"Now it will be a 100 percent Sri Lankan company which will do the importation, storage and distribution of gas," Treasury Secretary P.B. Jayasundera told reporters after signing the share purchase agreement in the capital Colombo.

He said the company will be re-named Litro Gas.

President Mahinda Rajapaksa’s government has followed a zero privatisation policy since he came to power in 2005, after anti-privatisation trade union actions by Marxists and leftist political parties.

It has reversed some privatisations carred out by earlier administrations to gain full control of the businesses.

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