Sri Lanka's national airline settles $175 million bond restructuring

Colombo, March 19, 2026 (AFP)
Sri Lanka's debt-ridden national carrier announced on Thursday that its creditors had agreed to accept a 16 percent reduction in value on a $175 million bond, completing the nation's debt restructuring.
When the country defaulted on its $46 billion external debt, the state-owned SriLankan Airlines also defaulted on its $175 million bond, which was due to mature in June 2024.
Bondholders representing 97 percent of the outstanding amount have voted to take a 16 percent haircut, the government and the carrier said in a joint statement.
It said international bondholders were being offered either an immediate cash repayment or new bonds carrying a four-percent coupon and maturing in 2028.
The completion of the deal "marks a significant step forward, allowing us to focus on the future of the company with renewed optimism," airline chairman Sarath Ganegoda said.
Sri Lanka had, by early last year, completed much of its debt restructuring with private and official creditors as the country emerged from its worst economic meltdown in 2022.
After the country ran out of foreign exchange to finance even essential food, fuel and medicines, it secured a $2.9 billion bailout loan from the International Monetary Fund (IMF).
Months of street protests over shortages led to the toppling of then-president Gotabaya Rajapaksa, who faced allegations of mismanagement and corruption.
The IMF required the government to ensure that SriLankan Airlines was not a burden on the national balance sheet, but efforts to sell it have so far failed to attract a buyer.
The flag carrier has huge debts, with estimated accumulated losses of 596 billion rupees ($1.9 billion) at the end of March last year.

Sumber : AFP