Debt restructuring with bondholders hits a snag with disagreement on two areas

• There were four areas with disagreements which were narrowed down to two.
• Negotiations with bond holders will continue
• IMF found the government’s proposals compliant 
• Sri Lanka has no issue with bilateral creditors
• Says had positive discussions with China

By Yohan Perera

Sri  Lanka’s debt restructuring process with private bondholders is stuck  with two aspects of disagreement, whereas it is well underway with  bilateral creditors, a top official said yesterday.
Chief  of Staff of the President Sagala Ratnayake told journalists that both  parties, instructed by respective consultants, held two talks this  year with each submitting proposals and counter-proposals. 
He  said the International Monetary Fund (IMF) cited the government’s  proposals as compliant, whereas the bondholders’ proposals were not.
After  that, he said there were four areas with disagreements were identified  and subsequent negotiations resulted in narrowing them down to two. 
Asked  whether it was the local dealer or foreign dealers (bondholders) who  disagreed, Mr. Ratnayake said these details could not be divulged.  “We  cannot come out with details on these factors as we have agreed to  maintain confidentiality concerning discussions,” he said in this  regard.
Also, he said discussions with private dealers are only a  part of the debt restructuring programme. “We have had a successful round  of negotiations with the Official Creditor Committee (OCC) which  comprises bilateral creditors. 
Sri Lanka has also had a successful  round of discussions with China as well. We have only to decide whether  there is going to be a single agreement with OCC or we are going for  individual agreement with each member state of the OCC,” he said in this  regard. He assured that Sri Lanka has no issue with the bilateral creditors.
“We have only to sign agreements with OCC members,” he said. 
Referring  to the sentiments expressed by the IMF, Mr. Ratnayake said all  international donors including the IMF have expressed its satisfaction with  the economic progress Sri Lanka has achieved lately. “However, IMF has  made it clear that it will stick to its programme,” he said.