A Sri Lankan court has extended an enjoining order until 30 July, temporarily preventing the winding-up of SriLankan Airlines over its failure to repay a defaulted bond worth hundreds of millions of dollars.
The extension comes as legal proceedings continue in Colombo Commercial High Court, where the bond trustee is demanding full payment of $209 million on a defaulted $175 million bond, which matured over a year ago on 5 June 2024. The additional $34.3 million reportedly accounts for missed payments due across four separate dates between 2022 and 2024.
During a court session, lawyers for the bond trustee requested more time to file their response after SriLankan Airlines secured the interim court order blocking its winding-up.
Legal representatives for the airline, however, argued that the bond trustees are not direct creditors and therefore lack legal standing to initiate winding-up proceedings under Sri Lankan company law.
The bond in question is guaranteed by the Sri Lankan government. This latest legal challenge adds to the carrier’s mounting financial woes, as it grapples with persistent losses, ballooning debts and a stalled privatisation process amid broader concerns over Sri Lanka’s economic recovery.
SriLankan Airlines has come under increasing scrutiny for its financial mismanagement and mounting liabilities. Though the airline has remained operational, concerns over its solvency and the implications of sovereign guarantees have continued to generate political and public controversy.
