Sri Lanka

Sri Lanka reached final restructuring agreements worth $10 billion, including with an Official Creditor Committee of bilateral lenders and China’s Exim Bank, providing much-needed relief to the beleaguered island nation, Bloomberg News reported. Sri Lankan officials in Paris on Wednesday signed a memorandum of understanding to restructure $5.8 billion of debt, finalizing an initial agreement struck late last year with the group of official creditors led by France, India and Japan.

Sri Lankan officials and global investors are expected to hold a second round of direct talks this week to agree on the restructuring of $12 billion in defaulted bonds, Bloomberg News reported. A group of bondholders, known as the steering committee, will continue to negotiate on the government’s new proposal in this round of the talks. The bondholders went “restricted,” meaning the conversations with the government are covered by temporary trading limitations because the topics under discussion may be market sensitive.

Sri Lanka and a group of creditors are in advanced talks over a deal aimed at restructuring the nation’s debt with bilateral lenders, Bloomberg News reported. The government and members of the official creditor committee, which includes India, Hungary and the Paris Club, are exchanging draft versions of the accord, or memorandum of understanding. The documents are needed to finalize an agreement reached in November between the South Asian nation and the official creditor committee and hash out the few remaining issues before a deal is settled.

Sri Lanka will hand over management of its $209 million Chinese-built airport to two Indian and Russian companies, a cabinet statement said on Friday, as the island nation attempts to reduce losses from its state enterprises. Mattala Rajapaksa International Airport (MRIA), funded by China EXIM Bank, has stoked controversy since its opening in 2013 due to a low number of flights, environmentally sensitive location and persistent financial losses. The airport's management will be handed over to Shaurya Aeronautics (Pvt) Ltd.

Sri Lanka on Tuesday rejected international bondholders' proposal to restructure more than $12 billion in debt, putting at risk critical International Monetary Fund support and delaying its efforts to resolve a two-year-long debt crisis, Reuters reported. Some of the proposal's "baseline" assessments and a lack of a contingency option in the case of continued economic weakness were two the main reasons the deal was not agreed, the government said in a statement.

Sri Lanka secured initial approval for the next loan tranche from a $3 billion International Monetary Fund bailout program, as the nation seeks to complete its debt restructuring, Bloomberg News reported. The staff-level agreement for the second review of the program gives the nation access to a payout of about $337 million — subject to approval from the IMF’s executive board, the Washington-based lender said in a statement. Funding is also contingent on implementation of prior actions, completion of financing assurances and adequate progress on debt restructuring, according to the statement.

Sri Lanka's president said Wednesday that he is seeking a loan repayment moratorium until 2028 as the debt-ridden country tries to emerge from bankruptcy, the Associated Press reported. President Ranil Wickremesinghe told Parliament the government is asking lenders to accept a plan to defer payments for five years and then pay down the debts from the beginning of 2028 through 2042.

Debt-stricken Sri Lanka’s economic reform program is yielding the first signs of recovery, but the improvements still need to translate into improved living conditions for its people, the International Monetary Fund said on Friday, the Associated Press reported. Sri Lanka has been struggling with an economic crisis since declaring bankruptcy in April 2022 with more than $83 billion in debt, more than half of it to foreign creditors. The crisis caused severe shortages of food, fuel and other necessities. Strident public protests led to the ouster of then-President Gotabaya Rajapaksa.

Sri Lanka's bankrupt government said Friday that a foreign debt restructure would be finalised by the beginning of April, after signs the economy was emerging from its worst crisis on record, AFP News reported. The island nation defaulted on its $46 billion foreign debt in 2022 after a foreign exchange wipeout left it unable to import food, fuel and other essentials. It secured a $2.9 billion International Monetary Fund (IMF) bailout last year which is conditional on a debt deal that satisfies foreign creditors.

Sri Lanka said on Wednesday that it has reached an agreement in principle with a group of creditors including India and Japan on debt restructuring, a crucial move toward unlocking a second instalment of a $2.9 billion bailout package from the International Monetary Fund, the Associated Press reported. The agreement with the Official Creditor Committee covers approximately $5.9 billion of outstanding public debt and consists of a mix of long-term maturity extension and reduction in interest rates, a statement from the country's Finance Ministry said.