State Minister of Finance Shehan Semasinghe 

State Minister of Finance Shehan Semasinghe yesterday said that Sri Lankan authorities continue to engage all debt restructuring negotiations in good faith, within principles of equitable treatment among creditors, and with maximum transparency within the norms of such negotiations. 

“It is standard practice, when a representative group of bondholders is formed, to entertain confidential discussions with such a group and its appointed advisors. In the case of Sri Lanka, the Ad Hoc Group of Bondholders represents holders controlling more than 50% of the bonds, which make them a privileged interlocutor for Sri Lanka,” said a statement from Semasinghe who is currently attending the World Bank-IMF spring meetings in Washington DC, USA.

“It is well understood that given the price sensitive nature of the negotiations, and according to market regulations, discussions with the Group and its advisors are to be conducted under non-disclosure agreements. This evidently restricts the ability of the Government to unilaterally report about the substance of the discussions,” he added.

Semasinghe said the cleansing statement, which was issued on 16 April, at the conclusion of this first round of confidential discussions with members of the Group, aimed at informing the Sri Lankan people, market participants and other stakeholders to this debt restructuring exercise, about the progress in negotiations. It provides the highest possible level of transparency within the internationally accepted practices in such circumstances.

As informed in this statement, confidential discussions held in recent weeks with bondholders’ representatives proved constructive, building on the restructuring proposals presented by both parties. During the talks both sides successfully bridged a number of technical issues enabling important progress to be made. Sri Lanka articulated key remaining concerns that need to be addressed in a satisfactory manner.

The next steps would entail further consultation with the IMF staff regarding assessments of the compatibility of the latest proposals with program parametres. Following these consultations, we hope to continue discussions with the bondholders with a view to reaching common ground ahead of the IMF board consideration of the second review of Sri Lanka’s EFF program, Semasinghe added.

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