SriLankan Airlines and the Government of Sri Lanka have announced that they have reached an agreement in principle with the Ad Hoc Group of Bondholders on the financial parameters of the restructuring of its USD 175 million in Guaranteed Bonds due June 2024.
Issuing a joint statement, the two parties said that the agreement was reached with six members of the Ad Hoc Group of Bondholders following restricted discussions during the restricted period, between 23 October and 19 November 2025.
SriLankan Airlines was joined by its financial and legal advisors, Lazard and Norton Rose Fulbright LLP, respectively, while the Ad Hoc Group of Bondholders were joined by their legal advisor, Akin Gump Strauss Hauer & Feld. The Ad Hoc Group of Bondholders controls approximately 55% the aggregate outstanding amount of the USD 175 million in Guaranteed Bonds (Notes).
Under the in-principle agreed terms, and subject to the successful implementation of the restructuring in accordance with such terms, the Government will be discharged from its liability pursuant to the guarantee and benefit from substantial debt and immediate liquidity relief to maintain the hard-fought long-term sustainability of its public finances.
Under the agreed terms, the restructuring will include a 15% haircut on the total claim amount of the Notes, with the remaining balance to be exchanged for a combination of cash and medium-term Government bonds carrying a 4% interest rate.
The in-principle agreed terms for the restructuring remain subject to final approval from Sri Lanka’s Cabinet of Ministers, as well as the non-objections of the International Monetary Fund (IMF) and Sri Lanka’s official Creditor Committee, pursuant to the Government’s commitments taken in the context of Sri Lanka’s overall public debt restructuring exercise.
The terms of the in-principle agreed restructuring have been communicated to Sri Lanka’s Official Creditor Committee for their non-objection, as well as the IMF, to ensure compliance with Sri Lanka’s long-term debt sustainability. Upon their confirmation, the Parties expect to be able to implement the transaction by the end of the year.
The implementation of the in-principle agreed terms will allow the company to complete the full normalization of its relations with its external creditors and to focus on ensuring the continuation of its operations.
Full statement:
