China has pledged to continue its support for Sri Lanka as the Prime Minister of the crisis-hit nation concludes his visit to Beijing. The visit aimed to finalize a debt restructuring agreement and address Sri Lanka’s economic crisis. China, which accounts for 10% of Sri Lanka’s foreign debt, has expressed willingness to negotiate with Sri Lanka and maintain friendly communication with other creditors. The two sides also discussed promoting infrastructure projects under the Belt and Road initiative.
Pakistan’s caretaker government and banks have reached an agreement to restructure the debt of Pakistan International Airlines (PIA). Under the plan, the government will use the proceeds from the sale of PIA for principal payments, while banks will accept a 10-year debt rollover with a 12% annual interest rate. This arrangement will result in annual interest payments of PKR 32.2 billion, surpassing the outstanding stocks of PKR 268 billion. The Ministry of Finance will seek approval from the International Monetary Fund, and banks will seek approval from their respective board of directors.
State Bank of India (SBI) and IL&FS have different views on debt restructuring at ITPCL, the bankrupt financier’s power joint venture entity. SBI wants an assessment of the liquidation value before signing on the proposal, while IL&FS, as part of its resolution framework, is not obligated to undertake a liquidation assessment for this asset. Last month, lenders approved a restructuring plan for ITPCL, with 59% of its debt classified as sustainable and the remaining 41% converted into non-convertible debentures. ITPCL operates a 1,200-MW power plant in Tamil Nadu.
