Debt Restructuring: Convert MoU's To Individual Bilateral Agreements

COLOMBO (News 1st); Sri Lanka's Finance Ministry said that the final restructuring agreement with the OCC reflected in the OCC Memorandum of Understanding signed on 26th January 2024 will be translated into individual bilateral agreements with each member of the OCC.

Similarly, domestic regulatory formalities will be concluded by Sri Lanka and Exim Bank of China to give effect to the Amendment Agreements.

This will enable the official restructuring to be implemented. The successful implementation of the restructuring agreements with official creditors will provide an impetus to the negotiations with commercial creditors.

It added that Sri Lanka continues to engage with its bondholders and their advisers which is expected to yield a restructuring agreement that meets the DSA targets and is comparable to the agreements reached with the OCC and Exim Bank of China.

As of now, the domestic debt restructuring has been completed, the official restructuring agreements have been concluded, leaving only the external commercial debt restructuring to be concluded for the overall debt restructuring process to be finalized.

On the 26th of June 2024, Sri Lanka reached final agreement on its debt treatment with the members of the Official Creditor Committee (OCC) of Sri Lanka’s major bilateral lenders, and also Bilateral Debt Treatment Agreements in relation to the loans owed by Sri Lanka to Exim Bank of China.

Accordingly, through these two sets of agreements reached on the 26th of June, 2024, Sri Lanka has successfully concluded the treatment of its debt with its major official bilateral creditors, including China, and the OCC members; Japan, India, France, Australia, Austria, Belgium, Canada,Denmark, Germany, Hungary, Korea, the Netherlands, Russia, Spain, Sweden, United Kingdom and the United States of America.

This amounts to a total of USD 10 billion agreed to be treated by these lenders.