SriLankan Airlines and the Government of Sri Lanka have completed a restructuring deal, following the expiration of a consent solicitation, exchange and tender offer tied to its $175 million government guaranteed bonds.
The initiative targeted bonds that were originally due in June 2024. This is part of the airline's efforts to stabilise its financial position, as well as the country's economy.
The offer was launched on February 20, 2026, with bondholders invited to exchange their holdings for a combination of cash and US-denominated 4.00% amortising PDI bonds due 2028. The proposal followed an earlier agreement in principle reached in November 2025 with a key group of bondholders representing around 55% of the outstanding debt.
SriLankan Airlines reported a “very high level of participation" with over 99% of bondholders taking part in the transaction and over 97% voting in favour. The airline said this level support allowed the existing bonds to be tendered and exchanged on the settlement date.
“The overall transaction results in a 16% haircut on the outstanding claim, and its successful completion marks a significant step forward that allows us to focus on the future of the company with renewed optimism,” said SriLankan Airlines chairman Sarath Ganegoda. “As the flag carrier of our island nation, this important progress toward financial recovery will further strengthen our ability to support Sri Lanka's economic prosperity.”
“The successful completion of this transaction paves the way for the full normalization of our relations with our external partners,” said Harshana Suriyapperuma, secretary to the treasury at the Ministry of Finance in Sri Lanka.
The settlement of the exchange and tender offer closed March 20.
Norton Rose Fulbright advised the airline on the restructuring. The team on the deal was led by Peter Young, with support from counsel Julian Walley, senior associate Tommy Chew and trainee solicitor Patrick Mulholland.
“This was a highly significant and complex restructuring, requiring intensive coordination among the issuer, domestic stakeholders and international bondholders,” said Young.
The Norton Rose team worked with the airline, its financial adviser, and a group of international bondholders and their counsel.