ECONOMYNEXT – A court in Sri Lanka has blocked potential winding up of SriLankan Airlines initiated by Trustees to defaulted bondholders, following a demand for full payment, court documents show.
Western Province Court Commercial High Court issued an enjoining order asked for by SriLankan Airlines, blocking the Trustees of the bonds or their agents from initiating any winding up procedures.
Romesh De Silva PC, with Manjuka Fernandopulle and Niran Anketell, instructed by Sanath Wijewardhena Associates appeared for SriLankan Airlines.
Law Debenture Trust (Asia) Limited, a Hong Kong based law firm retained by Trustees to bond holders, had sent a letter of demand to SriLankan on July 11, seeking full payment of 175 million dollars in defaulted bonds and 34 million in interest within 21 days.
The legal firm indicated that it would seek further action including winding up if payment was not made.
Deputy Solicitor General Nirmal Vigneshwaran, on behalf of the Sri Lanka Government of Sri Lanka has submitted that discussions were underway with bondholders to restructure bonds, Justice Nanayakkara noted in the
Based on submissions made by lawyers to SriLankan Airlines, Justice Amali Ranaweera noted that under Sri Lanka’s company law, creditors have to seek repayment and institute any winding up action.
But no creditor has made any demand and the law firm and trustee were not creditors under Sri Lanka law.
Court noted that firstly, the legal firm and trustees were not creditors and secondly the government has started negotiating with the creditors but they would try to wind up SriLankan without valid legal grounds.
Sri Lanka has hired Lazard Freres, to negotiate with an ad hoc group of investors who hold over 50 percent of securities.
Meanwhile SriLankan Airlines alleged that the letter of demand and the intimation of winding up was blackmail.
“The Plaintiff further pleads that the said letter has been written mala fide and amounts to a blackmailing tactic,” SriLankan told court.
“The Plaintiff reserves its right to take appropriate legal action including action through the criminal justice process against the relevant parties in respect of the aforesaid.”
Court blocked any winding up until the hearing, and issued summons on parties to appear on July 08. (Colombo/July08/2025)
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