Colombo, Apr 16 (PTI) The Sri Lankan government on Tuesday said it failed to reach an agreement with its bondholders for restructuring around USD 12 billion debt, in the latest setback for the cash-strapped island nation which is aiming to meet targets for the next tranche of the IMF bailout.

Sri Lanka aims to complete debt restructuring agreements with private creditors and sovereign bond-holders by June, in time for the next review of the International Monetary Fund (IMF) bailout programme.

Also Read | Israel-Iran Tensions: President Ebrahim Raisi Again Warns Tel Aviv Against Counterattack.

The Finance Ministry said that the government held restricted discussions over the past three weeks with nine members of the Ad Hoc Group of Bondholders but could not strike a deal.

“Despite constructive discussions, the parties did not come to an agreement on restructuring terms,” said the statement issued by RMP Ratnayake, Deputy Treasury Secretary.

Also Read | Borsen Stock Exchange Fire: Major Blaze Breaks Out in Historic Stock Exchange Building in Copenhagen, 120 Fire Tenders Present at Spot (Watch Videos).

It said that the government considered two separate proposals sent by the bondholders in March and early this month, while the bondholders rejected the government's proposal for a 28 per cent haircut.

Sri Lanka is “looking forward to continued engagement in good faith as soon as feasible, with a view to reaching common ground in the next few weeks, ahead of the second review of the IMF-Supported Programme being considered by the IMF Executive Board,” it said.

In March, the IMF said it had reached a staff-level agreement with Sri Lanka for the next phase, enabling it access to USD 337 million from the nearly USD 3 billion bailout approved in 2023 for the island nation.

Two tranches of USD 330 million each were released in March and December 2023, even as the global lender praised Colombo for its macroeconomic policy reforms, which it said “are starting to bear fruit”.

It's been two years since Sri Lanka declared its first-ever default on sovereign debt.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)