• President Wickremesinghe says “negotiations are proceeding smoothly”
• Restructuring plans to be presented to Parliament but no specific details given

Sri Lanka is upbeat about firming up talks with the bondholders, which will assist the island nation to come out of the ‘selective default’ status faster. President Ranil Wickremesinghe shared that finalisations can be reached as early as next week.

“Following the agreement, the discussions with the bondholders’ representatives are progressing well. Initially estimated to take about a month, these negotiations are proceeding smoothly and we anticipate completing them successfully by next week,” Wickremesinghe said. In addition to the official loans, Sri Lanka also borrowed from private individuals through bonds. 

Last week, Sri Lanka inked the debt restructuring agreements with the official creditors and China. The government plans to present both the agreements to Parliament for approval. However, the specific details regarding the agreements would not be shared, Wickremesinghe said.

“While I can’t detail all aspects here, I plan to provide a thorough explanation. I have informed him that, following the discussions and scrutiny by the State Finance Committee, we will prepare a report for a parliamentary vote. It is crucial for all parties in Parliament to participate in this vote,” he said.

Pointing out that the international community awaits Sri Lanka’s decision on these agreements, if any party proposes an alternative approach, Wickremesinghe said he is willing to facilitate discussions with the International Monetary Fund for them. 

“The government is willing to make arrangements to fund the necessary travel permits and accommodation for these discussions. They can proceed with their talks and if deemed beneficial, we will bring the matter to Parliament for consideration,” he said.

Wickremesinghe went on to assert that Sri Lanka has successfully steered clear of bankruptcy and continues to manage the country’s debt responsibly. Accordingly, through negotiations, Sri Lanka has secured concessions, where its total debt, currently at 108 percent of gross domestic product, will be restructured. Once commercial debt restructuring, including the International Sovereign Bond debt and syndicated loans held by China Development Bank is also concluded, the overall debt restructuring process would be completed. This will enable Sri Lanka’s credit ratings to be rerated.