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Sri Lanka seeks loan repayment moratorium in ongoing debt restructuring talks

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Sri Lanka is seeking a loan repayment moratorium for its US$ 12 billion bilateral debts until 2028 during the ongoing talks in London with bondholders on debt restructuring as the country still grapples to emerge from the economic crisis, a Finance Ministry top official divulged.

A bondholders steering committee is expected to reach an agreement or sign a memorandum of understanding considering a proposal from the government to rework the overseas debt that has been in default since 2022.

The government is asking lenders to accept a plan to defer payments for five years and then pay down the debts from the beginning of 2028 through 2042, the top official said.

China has expressed willingness to continue supporting its financial institutions to actively negotiate with Sri Lanka, maintain close communication with other creditors in the International Monetary Fund, and assist Sri Lanka in financial relief, China’s foreign ministry said in a joint bilateral statement (with Sri Lanka) on Friday.

This statement was issued following the conclusion of Prime Minister Dinesh Gunawardena’s visit to China, where he discussed finalising a debt restructuring deal on the instructions of President Ranil Wickremesinghe.

The two countries also signed nine new agreements amid Sri Lanka’s efforts to restructure and revive its economy.

Finance State Minister Shehan Semasinghe, who accompanied the Prime Minister, noted that Sri Lanka reached an agreement in principle with the EXIM Bank of China, and it could be extended further this year.

China’s Exim Bank had agreed to extend the US$4.5 billion debt servicing for two years starting in 2022 as an immediate contingency measure based on Sri Lanka’s request.

Sri Lanka’s largest bilateral debtors, China with $4.6 billion and India with $1.37 billion, are outside of the Paris Club.

India has already decided to go along with the Paris Club, but China does not want to get onto that platform.

China has given loans to several other countries in the world amounting to around $600 billion, and therefore it cannot consider Sri Lanka for preferential debt treatment, officials said.

Chinese authorities have already informed the government to resume the debt repayment from April 2024, and thereafter they can consider extending some relief.

Sri Lanka’s external debt stock stood at US$ 37.3 billion as of December 2023, bilateral debt at US$ 10.8 billion, multilateral debt at US$ 10.84 billion, and commercial loans at US$ 14.74 billion.

(Except for the headline, this story, originally published by sundaytimes.lk has not been edited by SLM staff)

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SLAF helicopter rescues stranded fishermen

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A group of fishermen stranded at sea off the coast of Balapitiya were rescued today by a Bell 412 helicopter under the directive of the Secretary of Defence.

The fishermen were aboard a vessel that encountered distress in rough sea conditions. Upon receiving the alert, the Sri Lanka Air Force launched the helicopter to assist in the emergency rescue operation.

The Department of Meteorology has issued a Red Alert warning for strong winds and rough seas around Sri Lanka, effective from 12:30 pm today (May 30) until midnight tomorrow (May 31).

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SLC postpones 03 domestic tournaments

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Sri Lanka Cricket (SLC) has announced the postponement of domestic tournaments due to the inclement weather conditions experienced in Sri Lanka.

According to a statement by the SLC, the decision to postpone the ongoing domestic tournaments has been taken by the SLC’s Tournament Committee.

The affected tournaments are :
– The Major Club T20 Tournament  
– Tier ‘B’ T20 Tournament  
– Governors Trophy

Sri Lanka Cricket further said that the revised schedules will be announced in due course.

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Mahindananda – Nalin transferred to common ward at Welikada

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Former Sports Minister – Mahindananda Aluthgamage as well as former Trade Minister and Sathosa Chairman – Nalin Fernando, have been placed in a common ward at Welikada Prison, where they will be held with other general inmates.

Prison authorities confirmed that both individuals were issued standard-issue jumpers, along with a mat and pillow, as per prison protocol. 

The two were brought to Welikada Prison yesterday afternoon following their sentencing and were subsequently subjected to medical examinations before being transferred to their assigned ward.

The Colombo Permanent High Court Trial-at-Bar yesterday (May 29) sentenced the duo over their involvement in a major corruption case linked to the importation of sports equipment, which is infamously known as the ‘Carrom Board’ case.

Ex-Sports Minister Mahindananda Aluthgamage was sentenced to 20 years of rigorous imprisonment while former Trade Minister – Nalin Fernando was sentenced to 25 years of rigorous imprisonment for his involvement in the case as the Lanka Sathosa Chairman at that time.

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