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Initial restricted discussions between SL and members of ad hoc group of bondholders concluded

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The government of Sri Lanka has announced that it held restricted discussions over the past three weeks (the “Restricted Period”) with nine members of the steering committee who agreed to take part in the restricted discussions (the “Steering Committee”) of the Ad Hoc Group of Bondholders (the “Group”, and together with Sri Lanka, the “Parties”) of its International Sovereign Bonds (“ISBs”). Sri Lanka was joined by its legal and financial advisors, Clifford Chance and Lazard, respectively, and the restricted members of the Steering Committee were joined by the Group’s legal and financial advisors, White & Case and Rothschild & Co, respectively. The Steering Committee as a whole comprises ten of the largest members of the Group, with the Group controlling approximately 50% of the aggregate outstanding amount of ISBs. Despite constructive discussions, the Parties did not come to an agreement on restructuring terms. The Steering Committee did not agree to an extension of the restricted discussions upon expiration of the current Restricted Period.

During the Restricted Period, Sri Lanka, the Steering Committee and its advisors met during a two-day working session in London on 27 and 28 March 2024 (the “Meetings”) to discuss the Group’s latest debt treatment proposal, sent to Sri Lanka’s advisors on 11 March 2024 (the “Group’s March Proposal”). Prior to the meetings, on 25 March 2024, Sri Lanka had also sent, through its advisors, its own debt treatment proposal to the Group’s advisors (“Sri Lanka’s Proposal”) which was rejected by the Steering Committee. Both the Group’s March Proposal and Sri Lanka’s Proposal are attached in the Annex hereto.

Prior to the Meetings, staff at the International Monetary Fund (the “IMF”) provided their preliminary and informal assessment of both Parties’ proposals’ consistency with Sri Lanka’s IMF-supported program (the “IMF-Supported Program”) parameters and debt sustainability objectives. The IMF staff assessment included an analysis of the sum total of restructuring proposals (for official and private creditors) based on agreed deals with certain creditors and the Sri Lankan authorities’ restructuring scenario for other creditors. On that basis, the IMF staff concluded that the debt treatment scenario included in Sri Lanka’s Proposal was consistent with the IMF-Supported Program debt sustainability targets, while the scenario included in the Group’s March Proposal was not. IMF staff noted that these were preliminary assessments and the IMF staff would provide final assessments only after the Parties had reached a tentative agreement in principle.

During the Meetings, it was agreed that the primary basis for the discussions would be the Group’s March Proposal. Sri Lanka articulated the main reservations it had in relation to the Group’s proposed Macro-Linked Bond (“MLB”) – while members of the Steering Committee articulated the reasons why they believed the terms of their MLB proposal were fair and reasonable.

The Steering Committee also suggested the possible introduction of a Governance Linked Bond, which Sri Lanka said it would consider subject to being provided with more details of this proposal. Such details on the possible structure of a Governance Linked Bond were subsequently shared with Sri Lanka’s advisors on 3 April 2024.

The discussions narrowed down to four features of the MLB:

1. The baseline parameters of the instruments proposed by the Group were calibrated by reference to the Group’s “alternative baseline”, rather than Sri Lanka’s IMF-Supported Program baseline.

2. The balance of risks between Sri Lanka and holders of its ISBs – While the Group had already updated its original MLB structure to include a scenario where Sri Lanka might underperform IMF-Supported Program GDP projections, Sri Lanka invited the Group to consider a structure that would provide greater protections to Sri Lanka in such a scenario.

3. The test for triggering upward/downward adjustments in the MLB.

4. The share of additional value in an upward adjustment scenario – Sri Lanka invited the Group to consider lower bondholder allocation in the scenario in which the country outperformed IMF-Supported Program GDP projections and satisfied the upward adjustment test in the MLB.

Over the course of the Meetings, the Parties came closer to a meeting of minds on Items 1 and 2, with the Steering Committee willing to agree to Sri Lanka’s request for amendments in relation to these two key structural aspects, subject to Sri Lanka (i) agreeing to a consent fee (with the Steering Committee proposing a fee of 1.8% of the outstanding principal amount of the ISBs) with a view to offsetting the Group’s perceived reduction of the market value of their proposal as result of such amendments and (ii) agreeing with the Group’s proposal on Items 3 and 4.

Following the Meetings, on 3 April 2024, the Group shared an updated version of its debt treatment proposal (the “Group’s April Proposal”), which addressed Items 1 and 2 in the manner described above. The Group’s April Proposal is also attached in the Annex hereto. The Group’s April Proposal is yet to be assessed by the IMF staff.

While recognising the efforts made by the Group in accommodating some of its key observations, Sri Lanka reiterated its reservations regarding the structure of the MLB trigger test and the cashflows associated with the baseline and upside scenarios (Items 3 and 4).

Sri Lanka would like to thank the Steering Committee, the Group and their advisors for their constructive stance, and looks forward to continued engagement in good faith as soon as feasible, with a view to reaching common ground in the next few weeks, ahead of the second review of the IMF-Supported Program being considered by the IMF Executive Board



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Sun directly overhead Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura at about 12.10 noon today (31)

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The sun is going to be directly over the latitudes of Sri Lanka from  28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (31) are Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura about 12.10 noon.

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BASL takes exception to Justice Ganepola being denied a place in SC

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… highlights injustice caused to Justice R. Gurusinghe

The Bar Association of Sri Lanka (BASL) has alleged that due to the failure on the part of President Anura Kumara Dissanayake to fill the existing vacancies in the Supreme Court, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled. The BASL pointed out at the time of Ganepola’s retirement there were four vacancies in the Supreme Court.

In a letter dated 17 August, 2026, addressed to President Dissanayake, the BASL declared that the failure to promote and recognise Ganepola’s distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

A top BASL spokesman told The Island yesterday (30) that the Bar Council, over the weekend, had decided to release the hitherto confidential letter.

The official said that they also wanted to remind the President of his assurance given to BASL, on 12 August, 2026, that vacancies in the Supreme Court and Court of Appeal would be filled as soon as possible, within a month.

The following is the text of the BASL letter, signed by  Rajeev Amarasuriya, President, BASL, and its Secretary Nalin De Silva: “We write further to our letters dated 29th December 2025 and 30th June 2026 in relation to the above, to which we have not received any response.

We also refer to our meeting with Your Excellency on 12th August. As discussed during the meeting, there have been vacancies in the Supreme Court since May 2025, and the number of vacancies has now increased to four (04). There are also four (04) vacancies in the Court of Appeal. These are all matters we have already written to Your Excellency about.

Your Excellency informed the BASL Delegation when we met that you would be taking steps to make recommendations to fill these vacancies as soon as possible, within a month.

We write to reiterate the importance of giving due consideration to the criteria set out in our aforesaid letter dated 29th December 2025. We also wish to emphasise that, in making judicial appointments and promotions, seniority should be given due priority, in keeping with longstanding practice, until such time there are objective and defensible guidelines governing the assessment of merit.

The only justifiable departure to this criterion would be where there exists a specific and recognized demerit in respect of the particular Judge concerned or such other known compelling circumstances that are objectively identifiable such as where a Judge has previously been overlooked for promotion unfairly or conversely, where a Judge has been unfairly previously granted promotions above others.

This approach will safeguard both the integrity of the Judiciary and the trust reposed in it by the public.

Further, while there has been considerable discussion and representation by the Government regarding the importance of retaining experienced judges, as reminded to Your Excellency at our said meeting that, only a few months ago on 8th May 2026, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled, and in which there were four vacancies at the time.

The failure to promote and recognise his distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

We also drew Your Excellency’s attention at the said meeting to the fact that the Senior-most Justice of the Court of Appeal, Justice R. Gurusinghe, who joined the Judicial Service in 1996, who also Acted in the Office of President of the Court of Appeal (appointed by Your Excellency) on 11th May 2026, is due to retire at the end of this month. In fact, we learnt through the Media that Her Ladyship then Chief Justice Justice Murdu Fernando, PC, had previously in July 2025 recommended to Your Excellency the promotion of Justice R. Gurusinghe to the Supreme Court, but the same is pending from that time.

 He too is well deserving of promotion to the Supreme Court and has already been recommended by the former Chief Justice, and his case must also receive due and urgent consideration before his impending retirement.

We hope that Your Excellency will take due note of and give due regard to the concerns of the Bar, as well as to the established principles, practices and conventions governing judicial appointments, when taking steps to fill these vacancies.

On this, Your Excellency is already open to the accusation that these vacancies have been kept open, to fill with favourites of the Government which is yet another serious indictment on the independence of the judiciary which accusation would be confirmed if recommendations are made outside established practice.

Moreover, the BASL expresses grave concern that withholding promotions of Judicial Officers for extended periods of time places undue pressure on Judicial Officers in the discharge of their duties and constitutes both directly and indirectly, interference with the independence of the Judiciary, in addition to the strain obviously caused to the dispensation of justice in other Courts and the stifling and delay of career progression of Judges legitimately entitled to promotions.

We do hope that Your Excellency would take due note and cognizance of the foregoing when effecting these judicial promotions which have been long overdue and which have already adversely impacted the efficiency and effectiveness of the administration of justice.”

The BASL has copied the letter to Prime Minister Dr. Harini Amarasuriya, Speaker Dr. Jagath Wickremaratne, Opposition Leader Sajith Premadasa and all members of the Constitutional Council.

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Sajith challenges govt. to hold PC polls

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Sajith

Opposition Leader Sajith Premadasa on Saturday (29) challenged the government to hold the long-delayed Provincial Council elections, saying the polls would provide an opportunity to gauge the level of public support enjoyed by the administration.

Addressing a farmers’ meeting in Tissamaharama, Hambantota, Premadasa also criticised the latest Rs. 17 per kilogram increase in wheat flour prices, warning that it would push up the prices of bread, bakery products and other flour-based food items and place further pressure on households already struggling with the rising cost of living.

He said Sri Lanka ranked 120th among 130 countries in an international comparison of minimum wages, arguing that wages remained inadequate to meet the escalating cost of living.

Premadasa also questioned official assessments of living standards, asking whether a person could survive for an entire month on Rs. 17,315, a figure he attributed to the Department of Census and Statistics.

He claimed that between 30 and 40 percent of the population was living in poverty and called for a clear programme to help affected families improve their economic conditions.

Turning to the proposed 22nd Amendment to the Constitution, which seeks to increase the retirement age of superior court judges, the Opposition Leader accused the government of attempting to undermine judicial independence and interfere with democratic institutions.

He also criticised the government’s handling of poverty, employment, agriculture, healthcare and investment, saying more effective measures were needed to provide relief to people facing economic hardships.Premadasa called for stronger policies to attract foreign direct investment and urged the government to formulate a national strategy for developing the tourism industry.

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