SL initiates debt restructuring talks with China, Japan and India

Sri Lanka has initiated debt-restructuring negotiations with the country’s main bilateral creditors   which include Japan, China and India, according to Minister of Plantation Industries and Minister of Industries, Dr. Ramesh Pathirana.

The Minister yesterday said the financial and legal advisors Lazard and Clifford Chance appointed by the government have already approached Japan, China and India for debt-restructuring negotiations.

Sri Lanka reached a staff-level agreement with the International Monetary Fund (IMF) for a US $2.9 billion Extended Fund Facility on September 1. 

However, the country is required to secure financial assurances from its external creditors to secure the final approval for the programme. 

Sri Lanka’s overall bilateral debt as at end-2021 stood at about US $ 10 billion, including the government-guaranteed SOE debts, and out of that, 44 percent was owed to China, 32 percent to Japan and 10 percent to India.

The Minister also said the government is planning to approach other creditors, including ISB holders, shortly.