Sri Lanka to raise US $ 500mn via bonds, divesting state hotels amid debt

Sri Lanka aims to raise US $ 500 million this month via development bonds and is in the process of divesting two stateowned hotels, the Central Bank and a ministry said yesterday, as the government faces unprecedented debt repayment this year.

President Maithripala Sirisena’s administration must repay an estimated Rs.1.97 trillion in 2018 a record high - including US $ 2.9 billion of foreign loans, and a total of US $ 5.36 billion of interest.

The Central Bank announced plans to raise US $ 500 million in two-year, three-year, four-year and five-year Sri Lanka Development Bonds (SLDB) out of planned US $ 3 billion for this year at both fixed and floating rate arrangement, the Central Bank said in a posting on its website.

The cabinet last week approved plans to borrow some US $ 5 billion in 2018, including US $ 2 billion of sovereign bond sales and US $ 3 billion of development bonds to refinance big debts that fall due this year.

A total of about US $ 2.5 billion worth of SLDBS mature this year.

The government has also called for a request for proposal (RFP) to find investors for Rs.45 billion worth of Grand Hyatt Colombo property that includes a 458-room, five-star hotel and 100 apartments.

The government has offered 100 percent shares in Grand Hyatt Colombo property and said an investor would be selected through a competitive process, the Public Enterprise Development Ministry said in a posting on its website.

The government has entered into a 20-year management contract with the Hyatt group to run the hotel, which is due to be completed and to begin operations this year.

The government also said it was seeking investors for a 51 percent controlling stake in a 350-room fivestar hotel in the heart of the capital, Colombo, which Hilton International runs under a management contract.

The ministry said Hilton International had indicated its desire to renew the contract after the current one ends in 2019.