Sri Lanka’s international bondholders group was prepared to engage with the island nation’s authorities in debt restructuring talks consistent with the parameters of the IMF Programme, their legal adviser, White & Case LLP, said.

The island of 22 million people, caught in its worst financial crisis in more than seven decades - caused by a severe shortage for dollars - defaulted on its foreign debt in May.

In September - after months of political unrest and having secured a preliminary agreement for a $2.9 billion bailout from the International Monetary Fund (IMF) - Sri Lanka kicked off restructuring talks with bilateral and private creditors to get the financing assurances needed before the funds can be disbursed.

“The Bondholder Group … stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period,” said the statement from White & Case LLP.

China has not done enough on Sri Lanka debt restructuring: US diplomat

Sri Lanka secured financing assurances from key bilateral lender India last month. The Paris Club of creditor nations, which includes Japan as a second major lender to Sri Lanka, is also expected to give its assurances to the IMF “soon”.

The Export-Import Bank of China has also offered Sri Lanka a two-year moratorium on its debt and said it would support the country’s efforts to secure an IMF programme. The United States wants China and other creditors to provide credible and specific assurances to the IMF to help Sri Lanka unlock the bailout, a senior official said this week.