MTD Walkers goes for Rs. 3.5 b Rights Issue

Tuesday, 30 November 2010 00:10 -     - {{hitsCtrl.values.hits}}

MTD Walkers Plc, Sri Lanka’s only listed, fully fledged engineering and infrastructure development company, is carrying out a comprehensive restructuring to consolidate its group investments.

As a part of this restructuring, MTD Walkers announced a Rights Issue of up to 108.6 million shares (in the proportion of 19 new Ordinary Shares for each existing share) at LKR 33.00 per share. Subject to shareholder approval at the Extraordinary General Meeting of the company to be held on 10 December 2010, the new shares will be offered to MTD Walker’s shareholders for subscription.

The company will announce details of the offering, including the dates of subscription period in the near future.

The proceeds of this Rights Issue will be used for the 100% purchase of Northern Power Company Private Limited, a 30MW HFO power plant located in Chunnakam, Jaffna, as the largest provider of electricity to the Jaffna Peninsula. The balance of the Rights Issue proceeds will be used for capital expenditure and working capital requirements of the MTD Group of Companies.

MTD Walkers Plc Chief Financial Officer Viraj de Silva said: “The proposed Rights Issue represents an important part of our comprehensive restructuring plan towards consolidating the MTD Walkers Group. Further the acquisition of Northern Power will expand the current operations of MTD Walkers adding significantly to the MTD Walker Plc financial outlook and granting the possibility of above average returns to shareholders.”

Walkers Group of Companies holds a history of 156 years of operations in Sri Lanka and is considered to be the oldest engineering company in the island. In April 2007, MTD Capital BHD a leading Malaysian infrastructure development company purchased a strategic stake in MTD Walkers Plc. This investment has bought about valuable technical and other infrastructure development expertise to the MTD Walkers Group.

The group, through its subsidiaries, Walkers Sons and Engineering Ltd., CML-MTD Construction Ltd, Walkers Piling Ltd has operations in construction, pilling and engineering. Post restructuring, the MTD Walkers Group will also have exposure to power generation through its purchase of Northern Power.

Ranked as one of Sri Lanka’s Top 3 engineering and manufacturing companies, MTD Walkers Plc under its subsidiary CML-MTD Construction (Pvt.) Ltd. has undertaken many road and bridge construction projects across the nation. As the government makes strides into developing the road network across the nation, MTD Walkers Plc plays a major role in this industry with contracts for the Southern Highway and other major highways and roads throughout the island.

As a pioneer in piling in Sri Lanka, Walkers Piling Limited another fully owned subsidiary of MTD Walkers Plc, commenced operations in January 1981 and undertakes large piling contracts for both the public and private sector in Sri Lanka. Some of the recent projects undertaken and completed by this division are the Sri Lanka Customs building, the Maligawatte fly-over, the Kerawalapitiya Power Station, the Arugambay Bridge, and the Headquarters of the Ceylon Petroleum Corporation.

Additionally the Mechanical Engineering Division has completed projects involving large steel fabrication work such as the renovation of 8 stop-logs in Randenigala with the Mahaweli Authority, the Arugambay steel bridge, construction and rehabilitation of Petroleum storage tanks.

Considering the above restructuring and the expansion plans the MTD Walkers Group is well poised for strong growth in the future.