(Bloomberg) -- Sri Lankan officials and global investors are expected to hold a second round of direct talks this week to agree on the restructuring of $12 billion in defaulted bonds, according to people familiar with the matter. 

A group of bondholders, known as the steering committee, will continue to negotiate on the government’s new proposal in this round of the talks, the people said. The meeting will be held in Paris, one of them said. The Paris Club is set to held this Wednesday the Paris Forum, an annual gathering in which representatives from both creditor and debtor countries meet in France to discuss debt issues

The bondholders went “restricted,” meaning the conversations with the government are covered by temporary trading limitations because the topics under discussion may be market sensitive, one of the people said. 

Representatives for the bondholders and the government were not immediately available to comment.

Swift progress on the matter is key as the country is scheduled to hold presidential elections in mid-October. In February, Sri Lanka sent a proposal to holders of dollar bonds as part of its plan to overhaul $27 billion of foreign debt, including bonds and loans. The restructuring is critical to ensure financing from the IMF bailout keeps flowing. 

Last week, strategists at Barclays said that the restructuring was progressing and likely to be completed in the next few months, meaning that the bonds offer value. 

Sri Lanka needs to reach deals with both bondholders and bilateral lenders to keep receiving IMF disbursements under a $3 billion program. Bloomberg reported earlier this month that the government and a group of creditors including India and the Paris Club were in advanced talks over a deal.

(Updates with details on the meeting in second paragraph.)

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