70ZL Govsrilanka 30s

THIS ANNOUNCEMENT CONTAINS INFORMATION THAT QUALIFIES, OR MAY QUALIFY, AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("UK MAR").

NOT FOR DISTRIBUTION IN ANY JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO PURCHASE OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN, NOR SHALL THERE BE ANY OFFER OR SALE OF SUCH SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

SRI LANKA ANNOUNCES SUCCESSFUL CONCLUSION OF SECOND ROUND OF RESTRICTED DISCUSSIONS WITH MEMBERS OF THE AD HOC GROUP OF BONDHOLDERS

Colombo, Sri Lanka, 3 July 2024  - The Government of the Democratic Socialist Republic of Sri Lanka ("Sri Lanka") announces today that it has held restricted discussions between 21 June 2024 and 2 July 2024 (the "Restricted Period") with nine members of the steering committee who agreed to take part in the restricted discussions (the "Steering Committee") of the Ad Hoc Group of Bondholders (the "Group", and together with Sri Lanka, the "Parties") of its International Sovereign Bonds ("ISBs"). Sri Lanka was joined by its legal and financial advisors, Clifford Chance LLP and Lazard, respectively, and the restricted members of the Steering Committee were joined by the Group's legal and financial advisors, White & Case and Rothschild & Co, respectively. The Steering Committee as a whole comprises ten of the largest members of the Group, with the Group controlling approximately 50% of the aggregate outstanding amount of ISBs.

During the Restricted Period, Sri Lanka, the Steering Committee and its advisors met during a two-day working session in Paris on 27 and 28 June 2024 (the "Meetings"). At the conclusion of the Meetings, Sri Lanka is pleased to report that, following negotiations, the Parties agreed core financial terms of a restructuring of the ISBs, the terms of which are embodied in a joint working debt treatment framework (the "Joint Working Framework"), a copy of which is included in the Annex to this announcement (which is also available as a PDF version through the link at the bottom of this announcement). In addition, the Parties agreed to include Governance-linked Bond features in the terms of one or more series of the plain vanilla bond instruments that form part of the Joint Working Framework.

As the Joint Working  Framework includes a state-contingent feature, it remains to be confirmed by (i) the Secretariat of Sri Lanka's Official Creditor Committee (the "OCC") to ensure comparability of treatment with the terms agreed between Sri Lanka and the OCC ("Comparability of Treatment") and (ii) the IMF staff to ensure consistency with the parameters and debt sustainability objectives of Sri Lanka's IMF-supported Program. As such, following the Meetings, the advisors to Sri Lanka and the Steering Committee will consult with each of the Secretariat of the OCC, to confirm the consistency of the Joint Working Framework with the principle of Comparability of Treatment, and staff at the IMF, to confirm the consistency of the Joint Working Framework with the parameters and debt sustainability objectives of Sri Lanka's IMF-supported Program.

During the restricted discussions, Sri Lanka and the Steering Committee also progressed discussions on certain non-financial provisions. 

Sri Lanka would like to thank the Steering Committee, the Group and their advisors for their close collaboration and valuable contribution in the Meetings, and looks forward to further constructive interaction to finalise the ISB restructuring.

This announcement is made by Sri Lanka and constitutes a public disclosure of inside information under Regulation (EU) 596/2014 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 ("EUWA") ("UK MAR"). For the purposes of UK MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055 as it forms part of domestic law in the United Kingdom by virtue of the EUWA, this announcement is made by R M P Rathnayake, Deputy Secretary to the Treasury of Sri Lanka.

ANNEX

***

This announcement does not constitute an offer of securities for sale in the United States. This announcement does not constitute an offer of securities for sale, or the solicitation of an offer to buy any securities, in any state or other jurisdiction in which any offer, solicitation or sale (if made) would be unlawful. Any person considering making an investment decision relating to any securities must inform itself independently based solely on an offering memorandum to be provided to eligible investors in the future in connection with any such securities before taking any such investment decision.

No offer of any kind is being made to any beneficial owner of securities located in a jurisdiction where the offer would not be permitted by law.

Forward-Looking Statements

All statements in this announcement, other than statements of historical fact, are forward-looking statements. These statements are based on expectations and assumptions on the date of this announcement and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Risks and uncertainties include, but are not limited to, market conditions and factors over which Sri Lanka has no control. Sri Lanka assumes no obligation to update these forward-looking statements and does not intend to do so, unless otherwise required by law.

Click on or paste the following link on your web browser to view the PDF version of the Annex:

http://www.rns-pdf.londonstockexchange.com/rns/0406V_1-2024-7-3.pdf