Sri Lanka hard-pressed against time to conclude agreements for debt restructuring

9 April 2024 08:44 am Views - {{hitsCtrl.values.hits}} 3 Bookmark

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Colombo, April 9 (Daily Mirror) - Sri Lanka is hard-pressed against time to reach agreements with creditors including bondholders before June, when the third tranche of the International Monetary Fund (IMF) extended fund facility is expected, Daily Mirror learns.

Sri Lanka is expected to get the next tranche of US $ 337 million in June after the third review of the programme.

Before that, Sri Lanka has to sign the MoU with the Paris Club of Nations on restructuring bilateral debts while signing a separate agreement with China for the same purpose but on terms acceptable to all the bilateral creditors.

Asked about the latest developments, a government source said the government to finalize the agreements in principle with commercial creditors including bondholders before that.

Besides, the presidential election is scheduled to be conducted later this year. The Election Commission is expected to issue the gazette notification calling for the election by the end of June, making it even more challenging for the government to finalize the debt restructuring process.

Sri Lanka declared bankruptcy in April, 2022 and since then the country has defaulted payments of US $ 6 billion.

The government is planning to settle 37 per cent of debts within the first six years after the resumption of debt servicing in keeping with the agreements to be reached, 51 per cent within 6- 20 years and the remaining 12 per cent after 20 years.

Cabinet spokesman Minister Bandula Gunawardane said whoever wins the election, debt servicing will continue according to the plan to be approved.

Comments - 3

Trevor Perera Tuesday, 09 April 2024 09:59 AM

This stinks from a million miles away. This is a ploy by Ranil Wickramasinghe and the Government to delay the Presidential and General elections. The excuse they will use is that loan restructuring has not been completed and the Government does not have funds to conduct elections as the 3rd tranch of the IMF bailout has not been received. One single man who lost his parliamentary seat is holding the entire country to ransom. Western nations should realise what is happening in the country and demand the return of democracy to the country.

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Shera Tuesday, 09 April 2024 06:13 PM

Why would you slack till the last minute when it is so important for the country to be ready for the next phase? The citizens have been through immense hardship since corruption bankrupted the country and the government needs to pull up their socks or sarongs and get to work! Whoever is responsible for being lackadaisical should be held accountable.

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Mohan Friday, 12 April 2024 02:50 PM

All agreements have to be agreed between two parties. The lenders who ever they are will drive a hard bargain. The Chinese loans in the main are with a bank not the Chinese government. Although the bank is owned by the Chinese government they are not influencing decisions by the bank. Sri Lanka is not in a strong negotiating position and it will be a last minute deal under duress.

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