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Debt restructuring talks with Ad Hoc Group of Bondholders back on track, thanks to IMF

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From left: State Minister of Finance Shehan Semasinghe, President’s Chief of Staff Sagala Ratnayake, Secretary to the President Saman Ekanayake and Central Bank Governoor Dr. Nandalal Weerasinghe at a meeting with the IMF in March 2024 regarding its programme for Sri Lanka

By Sanath Nanayakkare

State Minister of Finance Shehan Semasinghe said on Saturday that the government is confident about the successful progression of debt restructuring talks with Sri Lanka’s private bondholders.The state minister’s comments on the matter followed recent reports which indicated that the IMF was currently assessing the latest proposal of the Ad Hoc Group of Bondholders whose earlier proposal was not accepted by the Sri Lankan authorities.

According to a report released by First Capital Research, Sri Lanka rejected international bondholders’ proposal on 15th April 2024 to restructure more than USD 12 billion in debt. Despite ‘constructive discussions’ with the Steering Committee members of the Ad Hoc Group of Bondholders and the two sides could not reach agreement on restructuring terms.

Some of the proposal’s ‘baseline’ assessments and a lack of a contingency option in the case of continued economic weakness were the two main reasons the deal was not agreed.

The negotiations primarily focused on the bondholders’ proposal, particularly concerning the introduction of a Macro-Linked Bond (MLB).

The March proposal suggested a 20% haircut on the nominal amount of existing bonds and the April proposal increased the haircut to 28% with no haircuts on Public Debt Interests (PDIs) in both March and April proposals.

However, significant disparities arose regarding baseline parameters, risk balance, trigger tests, and the allocation of additional value in various MLB scenarios. Following discussions, the bondholders revised their proposal in April 2024 to address some of the government’s concerns.

The IMF is currently assessing the latest proposal of the Ad Hoc Group of bondholders. Also, Sri Lanka has recommenced discussions with bondholders and is optimistic on achieving a resolution regarding debt restructuring by June 2024, the report by First Capital Research stated.

State Minister Semasinghe’s comments affirmed the above backdoor details when he said,” The Paris Club and our bilateral creditors have already given their consent to restructure our debt. Meanwhile, we are confident that we can arrive at an agreement with the Ad Hoc Private Bondholders group as the second round of discussions with them is about to commence. A problematic situation in this regard won’t arise because we are being transparent with all our debt holders in how we are proposing to restructure each category of debt. Also, this procedure is embedded with another key element. That is; the finally agreed upon debt restructuring terms won’t lead to the necessity of a second round of debt restructuring in the future. We treat this as very important.”

“It has only been 18 months since Sri Lanka has achieved a semblance of stability after the economy came to a grinding halt. The economic theory put forward by the Opposition boils down to one single fact. They want the government to print money and balance the budget deficit. Their views point to the requirement of changing laws of the new Central Bank Act and reverting to money printing. Sri Lanka has already experienced the consequences of money printing in the past two years with its debilitating impact on inflation, the value of Sri Lanka rupee, the exchange rate and so on. The new CBSL Act was introduced to avoid falling into that pitfall again. So, whatever arguments the Opposition would make, the government won’t agree to money printing under whatever circumstances,” he stated.

Meanwhile, Sri Lanka gross official reserves stood at US$ 5,438 mn as at end April 2024. This includes proceeds from the People’s Bank of China (PBOC) swap arrangement worth US$ 1,400 million, which is subject to conditionalities on usability. This would mean that the country now has usable foreign reserves of US$ 4,038. This number stood at a mere US$ 20 million in mid-April 2022.



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JAT Holdings celebrates the 6th Pintharu Abhiman Convocation, uplifting over 800 painters through NVQ certification

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JAT Holdings PLC marked a significant milestone with the successful conclusion of the 6th JAT Pintharu Abhiman Convocation, recognising more than 800 painters who have earned their NVQ Level 3 qualification, an internationally recognised professional certification delivered in partnership with the National Apprentice and Industrial Training Authority (NAITA).

JAT Pintharu Abhiman was established to uplift Sri Lanka’s painter community through structured skills development, professional recognition and stronger earning potential. This year’s graduating cohort reflects the programme’s expanding reach and the tangible changes it continues to deliver for individuals, families and communities.JAT in collaboration with NAITA has streamlined the certification process such that what would traditionally take up to six months has been refined into an efficient and high-impact three-day assessment model. This approach ensures painters can obtain their qualification without sacrificing extended periods of work, while JAT fully absorbs the certification cost, removing financial barriers and enabling wider access to formal recognition.

Research conducted amongst NVQ qualified participants shows meaningful improvements in livelihoods, with 90 percent reporting increased personal confidence and 76 percent noting an improvement in their overall standard of living. This uplift demonstrates the long-term value of industry-aligned professional training.

A noteworthy moment at this year’s convocation was the recognition of four female painters who received their NVQ certifications. Their achievement marks an important step in broadening female participation in a field that has historically been male dominated, reinforcing JAT Holdings’ commitment to creating inclusive pathways for technical development and sustainable employment.

Speaking at the ceremony, Mr. Wasantha Gunaratne, Director Sales and Technical (South Asia) of JAT Holdings PLC, said:

“Pintharu Abhiman is fundamentally about development, giving painters the knowledge, structure and recognition they need to progress in their careers. By equipping over 800 painters with an internationally recognised NVQ qualification, we are not only strengthening the technical standards of the industry but also creating real pathways for entrepreneurship and financial independence. It is especially encouraging to see that one in five certified painters have already begun building their own businesses. These are the outcomes that matter because they show that when we invest in skills, we unlock opportunity. JAT remains committed to expanding these avenues so every painter has the chance to grow, lead and build a sustainable future.”

The 6th JAT Pintharu Abhiman Convocation underscores JAT’s continued dedication to uplifting the painter community, enhancing industry standards and supporting national skills development through accessible, professionally recognised qualifications.

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Industry bodies flag gaps in Draft National Electricity Policy

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The Ceylon Chamber of Commerce, together with the American Chamber of Commerce, Exporters Association of Sri Lanka, Federation of Renewable Energy Developers, Joint Apparel Association Forum, National Chamber of Commerce of Sri Lanka and Sri Lanka Association for Software and Services Companies, has submitted joint observations on the Draft National Electricity Policy, highlighting that several key issues have not been adequately addressed.

Whilst recognizing the need for reform in the electricity sector, the submission flags several gaps in the draft policy that require closer attention. Key areas such as affordability, decarbonisation commitments, incentives for renewable energy, competition, and the long-term financial health of the sector are either missing or not addressed in sufficient depth.

The proposed tariff revisions outlined in the draft energy policy raise concerns, particularly regarding the removal of cross-subsidies and the proposal to restrict subsidies exclusively to households consuming less than 30 kWh per month. Without detailed analysis, these measures could weaken access to sustainable and affordable energy and potentially lead to fiscal risks.

The provisions allowing uncompensated curtailment, removing feed-in tariffs, and imposing mandatory time-of-use tariffs on rooftop solar users could make renewable energy projects un-bankable for international lenders, thereby increasing the cost of capital for Sri Lanka.

Calling for a more future-focused approach, the submission stresses the need for a policy that reflects modern electricity systems, including planning for the energy transition, energy storage, market competition, cross-border electricity trading, and emerging technologies.

The Chambers and Associations request a comprehensive revision of the Draft National Electricity Policy, alignment with the Electricity Act, and resubmission following substantive consultation, and reiterate support to engage constructively with policymakers to shape a policy that supports affordability, investment confidence, and Sri Lanka’s long-term energy security.

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Bank of Ceylon partners with 36th APB Sri Lanka Convention

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Bank of Ceylon (BOC) partnered with the 36th Annual Convention of the Association of Professional Bankers (APB) Sri Lanka, reaffirming its commitment to promoting professional excellence and knowledge sharing within the banking sector. The partnership was officially handed over by Sameera D. Liyanage, Chief Marketing Officer of Bank of Ceylon and M. R. N. Rohana Kumara, Deputy General Manager Business Revival Unit of Bank of Ceylon, reflecting BOC’s focus on empowering banking professionals and supporting the sustainable growth of Sri Lanka’s financial services industry.

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