Sri Lanka’s cabinet said it has approved a proposal to seek the services of two international companies to identify who holds the country’s International Sovereign Bond (ISB).
Cabinet spokesman Bandula Gunawardena on Tuesday said Sri Lanka is facing the biggest economic crisis since independence and the country is unable to pay its foreign debt.
“We need to work our way through this. We need to work with the International Monetary Fund and we need to restructure our debt.
“Sri Lanka has suspended the repayment of two types of loans, that is bilateral loans and ISBs,” he said.
Gunawardena said that ISBs are the biggest portion of Sri Lanka’s foreign debt as the country has issued ISBs worth about 18 billion U.S. dollars from 2007 to 2019.
“A lot of investors have bought these. There are many investors from the U.S., the UK, France, and Germany. We have to identify them, and this is a complex process,” he said.
Gunawardena said President Ranil Wickremesinghe, also the Minister of Finance presented a cabinet paper on Monday and proposed that Sri Lanka secure the services to identify who holds the country’s ISBs and to communicate the government’s restructuring plans with them.
“The cabinet approved the proposal. This problem needs the input of foreign experts because this is an international problem,” he said.
According to Fitch Ratings, Sri Lanka’s cumulative foreign-currency debt-servicing payments between 2022 and 2026 amount to about 26 billion U.S. dollars.