COLOMBO, April 16 (Reuters) - Sri Lanka has failed to strike an agreement on restructuring about $12 billion of debt with its bondholders, the government said on Tuesday.
"The steering committee did not agree to extension of restricted discussions," it said in a regulatory filing.
Following talks with bondholders on the sidelines of the International Monetary Fund and World Bank Spring meetings in Washington, Sri Lanka said it failed to reach consensus on the bondholders' proposal submitted earlier in the month.
After the announcement, Sri Lanka's bonds were down between 2.3 and 2.8 cents , leaving them at just over half their original face value at between 53 and 55 cents on the dollar.
The much-anticipated agreement in principle was needed for the island to finalise the second review of a $2.9 billion programme with the IMF and get executive board approval for the release of about $337 million.
Sri Lanka said it looked forward to continuing talks with bondholders in good faith as soon as possible with a view to reaching common ground in the next few weeks and ahead of the second review of the IMF programme.
Sri Lanka plunged into its worst financial crisis since independence from the British in 1948 after its foreign exchange reserves ran to catastrophic lows in early 2022 leaving it unable to pay for essentials including fuel, cooking gas, and medicine.
The island nation defaulted on its foreign debt in May 2022 and kicked off negotiations with bilateral creditors several months later, eventually securing an agreement in principal with China, India and the Paris Club last November. (Reporting by Uditha Jayasinghe, writing by Shilpa Jamkhandikar; Editing by Jacqueline Wong)
