Debt restructuring agreement Sajith raises concern

• Harsha and Kabir welcome the agreement with official creditor nations

By Yohan Perera   
Sajith Premadasa, the leader of the Samagi Jana Balawegaya (SJB), raised concerns yesterday regarding the debt restructuring agreement signed by the government with official creditor countries, citing specific issues with the terms negotiated.   
“We would have welcomed the agreement if it benefited the nation but there are certain issues, Mr. Premadasa told a public gathering. “The IMF report talks of a grace period till 2033 while the government claims that it had got a grace period till 2028 from the official creditor nations. Also Sri Lanka might have to pay interests during this period,” he said at a public gathering in Bulathsinhala.    

• The bondholders may file legal action if Sri Lanka fails to reach an agreement with them by July 2

“No agreement has been reached with China Development Bank while nothing is said about the funds borrowed for the projects such as Lotus Tower. Also the bondholders may file legal action if Sri Lanka fails to reach an agreement with them by July 2,” he said.   
Meanwhile SJB MPs Harsha Silva and Kabir Hashim welcomed the agreement with official creditor nations.   
“We are happy about the agreement which Sri Lanka has reached with countries such as India, China and Japan and the Paris Club members. We won’t be cruel and are not prepared to jeopardize it,” MP De Silva told journalists.   
However, he said the debt restructuring issue is not fully over as agreement has to be reached with commercial creditors including international sovereign bondholders.” As we have heard the ISB holders have offered a 7 percent haircut. This is going to be a macro economic development based one. Sri Lanka is going to get a bigger haircut based on its GDP growth. The haircut is going to reduce if Sri Lanka’s GDP drops over the years. Therefore, we feel that Sri Lanka should not agree to such arrangement.