Colombo Dockyard to raise Rs. 13 b via Rights Issue

Tuesday, 8 July 2025 03:56 - - {{hitsCtrl.values.hits}}

Proposed issue at Rs. 40 each per share is part of $ 53 m deal to bring in India’s Mazagon to acquire controlling interest
Post-announcement, DOCK share price dips by 14% to Rs. 80.90

Colombo Dockyard PLC (DOCK) yesterday announced a Rights Issue 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, given the current stated capital being Rs. 714.395 million.

The decision was made by the DOCK Board of Directors at their meeting on 4 July.

Post-announcement yesterday, the DOCK share price declined by Rs. 13.20 or 14% to Rs. 80.90. Around 1.64 million DOCK shares changed hands via 1,230 trades for Rs. 134 million.

Before the trading halt to make way for the Rights announcement, the share price was Rs. 94.10 with around 1 million shares traded for Rs. 82 million. Net assets per share of DOCK as at 31 March 2025 was Rs. 66.75, down from Rs. 75.55 as at 31 March 2024.

The Rights Issue is subject to approval of the Colombo Stock Exchange (CSE) and the shareholders.

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, which has resulted in the company being placed on the Watch List of the CSE following the Independent Auditor’s Report containing an emphasis of matter on going concern. The proceeds will also support the company’s ongoing operational and financial obligations.

The Board also announced that under an agreement between the company, Onomichi Dockyard Co. Ltd., of Japan, which is the company’s present majority shareholder holding 51% of the company’s issued shares, and Mazagon Dock Shipbuilders of India, Onomichi will renounce all of its Rights entitlement to Mazagon. Mazagon has also reserved a right to apply for Rights shares remaining unsubscribed at the end of the issue.

Any unsubscribed shares at the end of the acceptance period will be made available for allotment to shareholders who have applied for additional shares, and those remaining unsubscribed thereafter may be allotted to Mazagon if Mazagon makes an application for such shares, so that the Rights Issue is fully subscribed.

The company has appointed the Corporate Solutions Unit of the Central Depository Systems (CDS) as the Registrar to the Rights Issue.

Late last month, 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).

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.