FINANCIAL CHRONICLE – State-owned SriLankan Airlines has successfully swapped a defaulted US$175 million debt with a new manageable payment plan, the island nation’s national carrier said in a statement.
On Friday (20), the company launched an official invitation to holders of the existing bonds to tender and exchange their holdings for cash and the U.S.$-denominated 4% amortizing PDI (past due interest) bonds due 2028 issued by the government, as agreed on November 20, 2025 with the members of the Ad Hoc Group of Bondholders, who collectively hold around 55% of the existing bonds.
“Following the expiration of the offer period, the Company and the Government are delighted to report a very high level of participation of over 99% of the total outstanding amount of the Existing Bonds,” the company said in a statement.
“Bondholders representing more than 97% of the outstanding amount voted in favour, resulting in all Existing Bonds being tendered and exchanged on the settlement date.”
This means the $175 million debt is now replaced by the new, stable 2028 agreement.
“We are sincerely appreciative of the bondholders’ strong participation,” Sarath Ganegoda, SriLankan’s Chairman, said in a statement.
“The overall transaction results in a 16% haircut on the outstanding claim, and its successful completion marks a significant step forward that allows us to focus on the future of the Company with renewed optimism.”
Harshana Suriyapperuma, Sri Lanka’s Treasury Secretary, said the successful completion of the transaction paves the way for the full normalization of relations with the country’s external partners.
“Having now successfully concluded restructuring agreements covering 99% of our public external debt, we extend our sincere appreciation to all stakeholders who supported Sri Lanka throughout this process,” he said.
“This achievement strengthens our position as we pursue our efforts to improve our credit rating.”
The delay in the conclusion of SriLankan Airlines debt restructuring had also dragged the country’s rating upgrade despite the country having inked most other bilateral and sovereign bond debt restructuring deals. (Colombo/March 20/2026)
