Softlogic secures Rs.42bn debt restructuring deal as total borrowings hit Rs.123bn

• Leisure exit accelerates

By Nishel Fernando
Softlogic Holdings PLC has successfully concluded negotiations to restructure debt amounting to over Rs.42 billion, securing critical grace periods of six to 18 months for capital repayments, according to its latest annual report.
This strategic financial engineering has begun to reshape the conglomerate’s balance sheet, which remains weighed down by a massive debt load of Rs.122.8 billion as of September 30, 2025.
The impact of the restructuring is already visible in the group’s latest interim financial statements. The group successfully shifted a significant portion of its short-term obligations to longer tenures, with non-current interest-bearing borrowings rising to Rs.57.3 billion, up from Rs.49.9 billion a year earlier. Consequently, immediate liquidity pressure has eased slightly, with the current portion of borrowings falling to Rs.15.1 billion, from Rs.17.7 billion in the previous year.  However, the group continues to grapple with high finance costs and a massive stock of short-term liabilities, including Rs.40 billion in other current financial liabilities and Rs.10.5 billion in bank overdrafts. In a decisive move to deleverage, Softlogic is accelerating its exit from the leisure sector. The board is actively seeking buyers for its flagship properties including NH Collection Colombo (formerly Movenpick) and NH Bentota Ceysands Resort. The urgency of this divestment is underscored by the sector’s deteriorating financial performance; despite a revenue increase to Rs.1.25 billion for the six months ended September 2025, the leisure cluster reported a widening operating loss of Rs.335 million. The sector dragged the group’s bottom line down by Rs.412 million after tax for the period, highlighting the critical need to convert these asset-heavy, cash-negative properties into liquidity.
The group is also overhauling its landmark Odel Mall mixed-use project. Reacting to shifting market dynamics, the management has scrapped the originally planned apartment complex, opting instead to convert the residential component into rentable office space to ensure steady recurring revenue. The group is currently seeking equity partners to raise approximately Rs.6.2 billion to complete this recalibrated project. Meanwhile, the Securities and Exchange Commission of Sri Lanka has granted a deferment on the suspension of trading of Softlogic shares until December 31, 2025. The suspension was originally triggered by an emphasis of matter on going concern in the Independent Auditor’s Reports.