Thursday Jan 22, 2026
Thursday Jan 22, 2026
Thursday, 22 January 2026 05:47 - - {{hitsCtrl.values.hits}}
Blue Diamonds Jewellery Worldwide PLC has said it is in discussions with a strategic investor in the jewellery industry as part of efforts to restore its capital position, after its net assets fell below the statutory threshold defined under the Companies Act.
The company said the Board has determined that it has incurred a serious loss of capital, triggering the requirement to formally notify shareholders and convene an Extraordinary General Meeting (EGM), which was held yesterday.
It said that its net assets as at 31 March 2024 stood at Rs. 114.56 million, compared to stated capital of Rs. 252.04 million. Based on these figures, the Board concluded that net assets had fallen below 50% of stated capital, constituting a serious loss of capital under the Act.
According to the audited financial statements for the year ended 31 March 2024, Blue Diamonds Jewellery recorded a net loss of Rs. 138.68 million, while cumulative net losses amounted to Rs. 197.86 million as at that date.
The Board attributed the capital erosion mainly to prolonged adverse market conditions affecting the jewellery sector, reduced turnover and margins, high fixed operating, compliance and listing-related costs, and working capital constraints.
Despite these challenges, the company said it continues to operate within a viable industry and retains strategic value as a listed entity.
As part of its remedial action plan, the Board said it has initiated discussions with a strategic investor, subject to the completion of due diligence, resolution of existing non-compliances with Colombo Stock Exchange (CSE) Listing Rules, and the negotiation and finalisation of definitive agreements.
If the negotiations are successful, the company expects to proceed with a capital raising exercise, subject to regulatory approvals from the CSE, the Securities and Exchange Commission of Sri Lanka, and other relevant authorities, as well as shareholder approval where required.
The Board said the anticipated outcomes of the proposed investment include the restoration of the company’s capital base, strengthening of liquidity and working capital, access to an established jewellery business and market opportunities, and improved long-term profitability and sustainability.
In parallel, the company intends to address outstanding corporate governance and listing compliance requirements, including the submission of overdue audited financial statements, matters arising from audit qualifications or disclaimers, regularisation of Board composition, proposed amendments to the Articles of Association where necessary, and settlement of outstanding statutory and professional obligations.
The Board reaffirmed its commitment to transparency, regulatory compliance, and implementing measures aimed at restoring financial stability and protecting shareholder value.
The trading of its shares has been suspended more than a year ago, since 10 December 2024. The company reported net assets of Rs. 0.07 a share as of end-September 2025. Its non-voting shares have a 55.97% public float.
