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Sri Lanka appoints team for Hamilton lawsuit

30 Jun 2022

   
  • Dr. Wijeyadasa PC says team discussing how to proceed with case
  • Says public will be informed of Sri Lanka’s response in coming weeks
  • Notes impact on IMF talks ‘cannot be stated’
    By Imesh Ranasinghe    Sri Lanka’s Ministry of Justice has appointed a team of officials to deal with the lawsuit filed by the Hamilton Reserve Bank Ltd. against the country demanding full payment of principal and interest on bond debt payments. Speaking to The Morning Business, Minister of Justice Dr. Wijeyadasa Rajapakshe PC said that the Ministry has appointed a separate team of officials and is holding discussions on how to proceed with the case. He added that he would inform the public in the coming weeks about how Sri Lanka has planned to respond to the lawsuit. Last week, Hamilton Reserve Bank, which is based in St. Kitts and Nevis, and holds more than $ 250 million worth of Sri Lanka’s 5.875% International Sovereign Bonds (ISBs) that were due 25 July, served a demand notice to HSBC Bank USA, which is the service agent for Sri Lanka sovereign bonds, while a lawsuit has also been filed in the New York Federal Court (Wall Street, Manhattan) demanding full payment of owed principal and interest on the July ISBs. Through legal action, Hamilton Reserve demands that Sri Lanka immediately pay all principal and accrued interest on the bonds that are currently due and payable to it, in the amount of the principal of $ 250,190,000, and accrued interest (which continues to accrue daily and will amount to $ 7,349,331.25 as of 25 July 2022), together with any interest thereon. Further, Dr. Rajapakshe PC said that it could not be stated with certainty that the suit will not have an impact on Sri Lanka’s ongoing talks with the International Monetary Fund (IMF) and on the debt restructuring process. Meanwhile, Advocata Institute Chief Operations Officer Dhananath Fernando said the lawsuit filed by Hamilton Reserve would have more of an indirect impact on the talks with the IMF, as the legal suit will somewhat delay the debt restructuring process, of which the IMF wants to know the direction. He added that the lawsuit filed by Hamilton Reserve against Sri Lanka alone would not have an impact on the ongoing IMF talks, as such legal action is common in debt restructuring processes. More than 30 asset managers holding Sri Lanka's International Sovereign Bonds announced on 21 June the formal launch of a creditor group to start debt restructuring talks with the country. Amundi Asset Management, BlackRock, HBK Capital Management, Morgan Stanley Investment Management, and T. Rowe Price Associates Inc. are among members of the group’s steering committee, which has Rothschild and Co. as financial advisor and White and Case LLC as legal advisor.  


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