Sri Lanka Nears Completion of Bond Restructuring Amid Financial Crisis

Sri Lanka is set to finalize talks on its bond restructuring process within weeks to address its severe financial crisis, Foreign Minister Ali Sabry revealed. This follows a provisional agreement to restructure $12.5 billion in international bonds and aims to save $8 billion through write-offs and repayment delays.

Sri Lanka will wrap up talks with international bondholders on its restructuring process in a few weeks, Foreign Minister Ali Sabry said on Tuesday, marking a significant step for the island nation to emerge from its worst financial crisis in decades.

'Hopefully within a couple of weeks,' Sabry said in an interview at the Reuters NEXT conference in Singapore, when asked about the timeline for the nation's bond restructuring efforts with creditors. 'Towards the end of this month, officially, we are done and dusted with the restructuring process. Then, of course, in line with that, we need to start payment,' he added.

Sri Lanka secured a provisional agreement with some of its bondholders to proceed with restructuring around $12.5 billion of international bonds last week, but now needs the remaining private creditors and the International Monetary Fund (IMF) to also agree. The country, which has $37 billion in external debt, reached an agreement with its official creditors, including Japan, China, and India in late June, to restructure $10 billion in debt. The total debt rework is estimated to save Sri Lanka $8 billion through write-offs and delay capital repayments by at least four years.

(With inputs from agencies.)