SriLankan Airlines and govt finalise $175 million bond restructuring

SriLankan Airlines and the Government of Sri Lanka have finalized the restructuring of the airline’s international bonds, achieving over 99% participation. This marks an important milestone in the airline's recovery process. Officials noted that the agreement includes a 16% reduction in debt and the issuance of new bonds, which will help stabilize the airline and support Sri Lanka's broader efforts to restructure its debt. Today, SriLankan Airlines Limited and the Government announced the end of the Consent Solicitation, Exchange, and Tender Offer linked to the U.S.$175,000,000 Guaranteed Bonds that are due in June 2024 and guaranteed by the Government. On February 20, 2026, the airline invited holders of the Existing Bonds to exchange them for cash and 4.00% amortizing PDI bonds due in 2028, issued by the Government. This was part of an agreement made with members of the Ad Hoc Group of Bondholders on November 20, 2025, representing around 55% of the total outstanding amount of the Existing Bonds. A statement revealed that, after the offer period ended, the Company and the Government were pleased to report a very high participation rate of over 99% from bondholders. More than 97% of the outstanding bond amount voted in favor, leading to all Existing Bonds being tendered and exchanged on the settlement date. SriLankan Airlines Chairman, Mr. Sarath Ganegoda, expressed gratitude for the bondholders’ strong involvement. He stated that the transaction results in a 16% reduction in the outstanding claims and that its successful completion is a significant step forward. This will enable them to focus on the future of the airline with renewed hope. He emphasized that as the flag carrier of Sri Lanka, this progress will help enhance the country's economic growth. Dr. Harshana Suriyapperuma, Secretary to the Treasury at the Ministry of Finance, commented that the successful completion of this transaction opens the door for the normalization of relations with external partners. With restructuring agreements now covering 99% of public external debt, he thanked all stakeholders who supported Sri Lanka during this process. This success strengthens their position as they work to improve their credit rating.