SriLankan Airlines completes bond restructuring with over 99% participation

SriLankan Airlines and the Government of Sri Lanka have completed a major international bond restructuring with over 99% participation, marking a key step in the airline’s recovery.

Officials said the deal includes a 16% haircut on the outstanding claim and the issuance of new bonds, helping strengthen both the airline’s financial stability and Sri Lanka’s broader debt restructuring efforts.

SriLankan Airlines Limited and the Government announced on Thursday (March 19) the expiration of the Consent Solicitation, Exchange and Tender Offer related to the airline’s U.S. $175 million guaranteed bonds, which were due in June 2024 and backed by the Government.

The airline had launched the offer on February 20, 2026, inviting bondholders to exchange their existing holdings for cash and new U.S. dollar denominated 4.00% amortizing PDI bonds due in 2028. This move followed an agreement in principle reached on November 20, 2025, with an Ad Hoc Group of Bondholders representing about 55% of the total outstanding bonds.

According to an official statement, more than 99% of the total outstanding bond value participated in the process. Bondholders representing over 97% of the total amount voted in favour of the proposal, resulting in all existing bonds being tendered and exchanged on the settlement date.

SriLankan Airlines Chairman Sarath Ganegoda said the strong participation reflects investor confidence and described the outcome as a significant milestone. He noted that the restructuring allows the airline to move forward with renewed focus and supports its role in contributing to Sri Lanka’s economic growth.

Secretary to the Treasury at the Ministry of Finance, Dr. Harshana Suriyapperuma, said the successful completion of the transaction helps normalize relations with international partners. He added that Sri Lanka has now finalized restructuring agreements covering 99% of its public external debt, strengthening the country’s position as it works to improve its credit rating.

The settlement of the exchange and tender offer is expected to take place on March 20, 2026, subject to the required conditions being met.