Sri Lanka settles score with Lanka IOC

Sri Lanka inked a Rs5.16 billion (US$47.58 million) agreement with Indian fuel retailer Lanka IOC Ltd. to settle a long-standing subsidy payment. A unit of Indian Oil Corp., Lanka IOC will get Rs700 million (US$6.45 million) in cash and Rs4.46 billion (US$41.13 million) worth of two-year government bonds. Part of the settlement deal includes aborting LIOCs agreement with Colombo due to end in 2008 and cutting profit margins, calculated as 5% on base retail prices before value added tax, to 1.5%. (January 5, 2007)