SriLankan Airlines Limited and the Government of Sri Lanka announced the successful completion of a consent solicitation, exchange, and tender offer for the airline’s U.S.$175 million guaranteed bonds due June 2024. The process, launched on February 20, 2026, followed an agreement in principle reached on November 20, 2025, with an ad hoc group of bondholders holding approximately 55% of the outstanding bonds.
Bondholders tendered their holdings for cash and new U.S. dollar-denominated 4% amortizing past due interest bonds due 2028, issued by the Government. Participation exceeded 99% of the total outstanding amount, with more than 97% voting in favor, resulting in all existing bonds being exchanged. The transaction includes a 16% haircut on the outstanding claim. Settlement occurred on March 20, 2026, subject to standard conditions.
SriLankan Airlines Chairman Sarath Ganegoda stated, “We are sincerely appreciative of the bondholders’ strong participation. The overall transaction results in a 16% haircut on the outstanding claim, and its successful completion marks a significant step forward that allows us to focus on the future of the Company with renewed optimism.”
Treasury Secretary Dr. Harshana Suriyapperuma noted, “The successful completion of this transaction paves the way for the full normalization of our relations with our external partners. Having now successfully concluded restructuring agreements covering 99% of our public external debt, we extend our sincere appreciation to all stakeholders who supported Sri Lanka throughout this process.”
This restructuring aligns with Sri Lanka’s broader sovereign debt reorganization, addressing nearly all external obligations and supporting credit rating improvement efforts.