COLOMBO (REUTERS) - Sri Lanka President Ranil Wickremesinghe said on Friday (Aug 5) that the country is considering a restructure of local as well as sovereign debt, as the island nation battles its worst financial crisis in its independent history.

Sri Lanka is due to restart bailout talks with the International Monetary Fund (IMF) in August in the hope of securing US$3 billion (S$4.13 billion) in funding.

The government is working with its financial and legal advisers Lazard and Clifford Chance to finalise a plan to restructure overseas debt, including about US$12 billion owed to bondholders.

"Have we got to look at local debt? That has far-reaching consequences," Mr Wickremesinghe told a conference in Colombo on Friday.

"The financial advisers are looking at both things."

Sri Lanka's central bank governor said on July 7 that the country would not seek to restructure local debt.

The IMF also previously warned countries of issues restructuring local debt, pointing to the impact on domestic banks.

"Restructuring domestic debt is like surgery - you only do it if you must, and you avoid it if it might do more harm than good," officials at the IMF said in a blog post in December.