Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part XI · Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
289. Variation of MSME Company Debt Restructuring Arrangement
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
Where a court has made an order confirming the coming into effect of the MSME Company Debt
Restructuring Arrangement, the Arrangement may be varied in accordance with its terms and subject to this section.
A personal insolvency administrator, whether on its own initiative or on the request of a MSME debtor or creditor, shall propose a variation of a MSME Company
Debt Restructuring Arrangement where -
it appears to the personal insolvency administrator that there has been a material change in the
MSME debtor’s circumstances; and
the personal insolvency administrator is satisfied that there is a reasonable prospect that a variation that addresses such circumstances would be approved by the MSME debtor’s creditors.
Where the conditions in subsection (2) apply, the personal insolvency administrator shall, as soon as is reasonably practicable-
require the MSME debtor to complete an updated statement of the MSME debtor’s financial affairs;
assist the MSME debtor in preparing a proposal for a variation of the MSME Company Debt
Restructuring Arrangement;
seek the consent of the MSME debtor to the proposal and also seek creditor approval of the proposal; and
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write to each affected creditor to repond by indicating whether the proposal should be accepted.
When writing to each affected creditor under subsection (3) in respect of a proposal to vary a MSME
Company Debt Restructuring Arrangement, the personal insolvency administrator shall-
provide the creditor with a copy of-
the proposal; and
the updated statement of the MSME debtor’s financial affairs;
provide the creditor with a statement to the effect that-
the MSME debtor satisfies the eligibility requirements of section 278;
to the best of the personal insolvency proposer’s knowledge, the information contained in the MSME debtor’s updated statement of financial affairs is complete and accurate;
the proposal is a reasonable means of addressing the relevant change in the MSME debtor’s circumstances; and
the proposal has a reasonable prospect of being approved and implemented;
make a request of the creditor to provide a written response, via physical or electronic mail, setting out whether the proposal should be accepted; and
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inform the creditor of the deemed notice provision in subsection (6) and the need to provide this response to the personal insolvency practitioner in advance of the applicable deadline.
A proposal to vary a MSME Company Debt
Restructuring Arrangement is accepted if -
the MSME debtor provides consent in writing to the variation of the Arrangement;
the personal insolvency administrator writes to the affected creditors of a MSME debtor under this section;
replies accepting the proposal are provided, before the deadline stated in subsection (4), by creditors whose claims represent a majority in value of two thirds per cent of the claims of all creditors bound by the Arrangement; and
where the variation includes terms modifying or limiting the rights of secured creditors and hire-purchase agreement counterparties, replies accepting the proposal as varied are provided, before the deadline stated in subsections (4), by any such creditor whose rights are so modified or limited in the variation.
For the purposes of subsection (5), a creditor who does not provide a response to the personal insolvency administrator before the applicable deadline under subsection (4), shall be deemed to have stated that the proposal to vary the MSME Company Debt Restructuring Arrangement should be accepted.
When a proposal to vary a MSME Company Debt
Restructuring Arrangement has been accepted, the personal
Rescue, Rehabilitation and Insolvency insolvency administrator shall, as soon as is reasonably practicable, submit to the Official Receiver –
a notice of the creditor responses approving the variation to the MSME Company Debt
Restructuring Arrangement; and
the final terms of the varied Debt Restructuring
Arrangement.
On receiving the documents set out in subsection (7), the Official Receiver shall issue a certificate recommending the confirmation of the varied Debt Restructuring
Arrangement.
On issuing a certificate recommending the confirmation of a varied Debt Restructuring Arrangement, the Official
Receiver shall-
present this certificate, together with the notice of the creditor approval of the proposal to vary the MSME Company Debt Restructuring
Arrangement, and the final terms of the varied
Arrangement, to the appropriate court; and
notify the MSME debtor, the personal insolvency administrator and all creditors listed in the
Arrangement, of the issuance of the certificate.
Where the court receives a recommendation from the Official Receiver with respect to a variation of a MSME
Company Debt Restructuring Arrangement under subsection (9), the court shall consider the recommendation, and make an order confirming the coming into effect of the varied
Arrangement.
Where the court makes an order confirming the coming into effect of the varied Arrangement under
Rescue, Rehabilitation and Insolvency subsection (10), the provisions of this Part shall apply to the varied Arrangement as if the varied Arrangement were an
Arrangement confirmed under this section.
Part XII
Part XIII
Part XIV