Colombo Dockyard to proceed with Rights Issue

Thursday, 16 October 2025 05:55 - - {{hitsCtrl.values.hits}}

Colombo Dockyard PLC yesterday confirmed it will proceed with the planned Rights Issue after shareholder approval. The major shareholder, Onomichi Dockyard Company Ltd. will not renounce its rights to Mazagon Ship Builders Ltd. but will refrain from subscribing. The resulting shares will be allotted to Mazagon, subject to shareholder approval via a Special Resolution. This procedure was approved by the Board on 1 October 2025.

Colombo Dockyard announced the Rights Issue last July to raise Rs. 13 billion as part of the deal to bring in India’s Mazagon as controlling shareholder.

The Rights Issue will be on the basis of nine new shares for every two held at Rs. 40 each. The move will see the issuance of 323,365,158 new shares.

The proceeds of the Rights Issue are intended to be utilised to strengthen the company’s financial position and improve its working capital base in view of the severe financial constraints currently faced by the company. The proceeds will also support the company’s ongoing operational and financial obligations.

In June 2025, Mazagon signed an agreement with Onomichi and DOCK to invest $ 53 million to acquire controlling interest in a strategic deal (See https://www.ft.lk/top-story/Indian-giant-Mazagon-strikes-deal-to-buy-Colombo-Dockyard-for-53-m/26-778327).