REG - Sri Lanka (Republic) - Conclusion of Second Round Restricted Discussions

GDS HoldingsAnnouncement

03/07/2024 17:30

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RNS Number : 0406V  Sri Lanka (G.D.S. Republic of)  03 July 2024

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.

     ANNOUNCEMENT BY THE GOVERNMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI
     LANKA IN RELATION TO THE FOLLOWING SERIES OF BONDS ISSUED BY THE ISSUER:
     U.S.$1,000,000,000 6.85% BONDS DUE 2024
     Rule 144A ISINs: US85227SAY28; Reg S ISIN: USY8137FAN88
     U.S.$500,000,000 6.35% BONDS DUE 2024
     Rule 144A ISINs: US85227SBA33; Reg S ISIN: USY8137FAQ10
     U.S $1,400,000,000 7.85% BONDS DUE 2029
     Rule 144A ISINs: US85227SAZ92; Reg S ISIN: USY8137FAP37
     U.S $1,500,000,000 7.55% BONDS DUE 2030
     Rule 144A ISINs: US85227SBB16; Reg S ISIN: USY8137FAR92
     (the "Bonds")

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

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