SriLankan Airlines secures a landmark financial restructuring with over 99% bondholder participation, achieving a 16% haircut and paving the way for economic recovery and improved credit ratings.
SriLankan Airlines Limited, together with the Government of Sri Lanka, has announced the successful expiration of the Consent Solicitation, Exchange and Tender Offer concerning the company’s U.S.$175 million Guaranteed Bonds due June 2024, which were guaranteed by the Government. The completion of this process marks a significant milestone in the national carrier’s financial restructuring journey.
The formal invitation was launched on February 20, 2026, inviting holders of the existing bonds to tender and exchange their holdings for cash and newly issued U.S. dollar denominated 4.00% amortizing PDI bonds due 2028, referred to as the New Republic Bonds. This followed an agreement in principle reached on November 20, 2025, with the Ad Hoc Group of Bondholders, who collectively held approximately 55% of the total outstanding amount.
Following the close of the offer period, the company and the government reported an exceptionally high participation rate of over 99% of the total outstanding bonds. Additionally, bondholders representing more than 97% of the outstanding amount voted in favor, resulting in all existing bonds being tendered and exchanged on the settlement date.
Mr. Sarath Ganegoda, Chairman of SriLankan Airlines, expressed his appreciation for the strong support from bondholders. He noted that the overall transaction delivers a 16% haircut on the outstanding claim, describing the successful completion as a significant step forward that allows the airline to focus on its future with renewed optimism. He emphasized that as the national flag carrier, this progress toward financial recovery will further strengthen its ability to contribute to Sri Lanka’s economic prosperity.
Dr. Harshana Suriyapperuma, Secretary to the Treasury at the Ministry of Finance, stated that the successful completion of this transaction paves the way for the full normalization of relations with external partners. He highlighted that with restructuring agreements now covering 99% of the country’s public external debt, sincere appreciation is due to all stakeholders who supported Sri Lanka throughout the process. He added that this achievement strengthens the nation’s position as efforts continue to improve its credit rating.
The settlement of the exchange and tender offer is scheduled to take place on March 20, 2026, subject to the fulfillment of relevant settlement conditions.
For any questions related to this transaction, stakeholders may contact Sodali & Co Limited, the appointed Information, Tender, Tabulation and Exchange Agent, via email at srilankanairlines@investor.sodali.com or visit the dedicated transaction website at https://projects.sodali.com/srilankanairlines.
