ECONOMYNEXT – Sri Lanka tax payers will fork out 100 billion rupees to take over state bank loans of SriLankan Airlines with 25 billion rupees being injected in 2025, officials said, not counting the cost of restricting sovereign guaranteed bond.
The 100 billion rupees will be injected over 5 years as equity, Deputy Treasury Secretary A K Seneviratne told the parliament’s Committee on Public Finance.
The Treasury had guaranteed loans of 50.675 billion taken from Peoples Bank 44.656 billion rupees, documents released along with a budget for 2026 sshow.
There were around 210 million US dollars of forex loans and around 30 billion of rupee credits, which will be restructured before the end of 2025, and repaid over 5 years at a rate of around 20 billion in principal, Seneviratne said.
Some of the loans were in rupees charged at 16 percent, others were in US dollars at rates around 10 percent, Seneviratne said. The rupee loans would be converted to SLFR+1, the US dollar loans would be reduced to around 6 percent.
The day one loss of close to 13 billion rupees goes to co
ver the reduction in interest rates.
The restructuring was the result of a year long negotiations, amid central bank rules to ensure that banks remained solvent, Damitha Rathnayake, Additional Director General, Treasury Operations said.
Similar procedures were followed in the case of energy utility loans, Seneviratne said.
A supplementary estimated will be presented to parliament for some extra funds.
In 2025, a payment of around 25 billion rupees will be made to state banks to cover the ‘day one loss’ on interest rate reduction, interest for 2025 and around another 10 billion rupees for capital repayments.
The loans are restructured effective April 2026, he said.
“A lot of the public money is going to SriLankan, every year, it is in the tens of billions,” COPF Chairman Harsha de Silva said. “It is like a black hole.”
For the last eight months, SriLankan has no chief executive, he said.
- https://economynext.com/sri-lanka-t...n-take-over-srilankan-state-bank-debt-249429/
