Financial Times

Hedging: Banks want all


The five commercial banks involved in the controversial hedging deals with the Ceylon Petroleum Corporation (CPC) are unwilling to budge from their positions and seeking full payment on the claims, informed sources said.

One source, close to the ministerial committee appointed by President Mahinda Rajapaksa to look at a possible re-negotiation of the hedging contracts, said the banks had sent their written submissions to the committee. “They are not willing to budge from their positions,” the source said.

The hedging deals were said to be one-sided and heavily in favour of the five banks – Standard Chartered, Citi, Deutsche, Commercial and People's. The CPC owes the banks a sum of around $800 million. The source said the the position between CPC and banks has ‘crystalised’ which means settling the issue right now instead of waiting for the due date – June 2009 - when the contracts end.

“The committee is looking at all issues without prejucide to legal matters,” the source said.

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