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Three leading international firms express interest to assist SL debt restructuring

Several leading international firms have expressed their intrest in providing financial advice in its efforts to restructure external debt running up to US$ 12 billion, Finance Ministry sources said.

This was in resposnse to call made by the Finance Ministry has finally for Requests for proposals (RFPs) from reputed global firms to appoint financial advisors and legal consultants to support the country’s sovereign debt restructuring exercise.    

Three leading international firms, Ayres Investment Management LLP, DecisionBoundaries LLC and Perella Weinberg LP are among firms seeking to provide financial advice to Sri Lanka’s , reuter news agency reported

 However Sri Lanka may take nearly three weeks to appoint advisers to guide an overhaul of its debt, according to according to Finace Minister Ali Sabri ina move seen as key to unlock emergency funds needed to ease its worsening economic crisis.

The country is aiming to choose financial and legal advisers in 15 to 20 days, Finance Minister Ali Sabry said in a Bloomberg Television interview with Kathleen Hays and Haidi Stroud-Watts late Wednesday in Washington. 

Some bondholders are weighing their options after the South Asian island nation unilaterally suspended external debt payments ten days ago, four sources familiar with the situation said, asking not to be named because talks are private.

The move comes as the government faces ongoing street protests over fuel, food and medicines shortage. With little foreign currency, the crisis-hit nation of 22 million people has also asked for emergency aid from the International Monetary Fund (IMF) and bilateral lenders, such as China and India.

Asset managers BlackRock Inc. and Ashmore Group Plc. are among the creditors organizing in a group ahead of the talks, and have hired law firm White & Case for advice, Reuters reported.

Recent filings show major asset managers such as Fidelity, T Rowe Price and TIAA also hold some of the country’s outstanding dollar bonds.

A debt restructuring would be the first for Sri Lanka, facing its worst economic crisis in decades

 “The Government of Sri Lanka through Ministry of Finance has published the Request for Proposals (RFPs) from interested parties/agencies for the appointment of Financial Advisors and Legal Consultants for managing its external debt sustainability,” the Central Bank (CB) announced on Saturday.

Last Friday, newly appointed CB Governor Dr. Nandalal Weerasinghe assured that financial advisors and legal consultants would be appointed within two weeks, expediting the procurement process. 

The bids were closed on 16th of this month and subsequently authorities are expected to complete the evaluation process within a week and finalise suitable parties.

The financial advisor will be tasked with supporting the government in debt management including evaluating government debt stock and representing the government’s interest in negotiation with creditors and arranging meetings with them.  

The financial advisor will also be responsible for designing a mechanism and process to engage with IMF in improving medium and long-term debt engagement and reforming strategies.

The government is seeking to appoint an experienced financial advisor with global and regional presence. Further, the government also welcomes joint bids from two or more financial advisors.

Meanwhile, the legal consultant will advise the government on debt management strategies and execution of such strategies while reviewing legal and regulatory issues on debt management.

Along with the financial advisor, the legal consultant will also be tasked with representing the government’s interest in negotiation with creditors and arranging meetings.In addition, the legal consultant will also be tasked with coming up with strategies for the government in securing development assistance from official development agencies and during the debt restructuring exercise and reaching consensus with private creditors and bilateral official creditors on possible re-profiling of public debt.

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