Friday Dec 12, 2025
Friday Dec 12, 2025
Thursday, 11 December 2025 06:22 - - {{hitsCtrl.values.hits}}
Capital markets regulator, the Securities and Exchange Commission of Sri Lanka (SEC) has granted approval for Onomichi Dockyard Company Ltd., to sell its entire shareholding in Colombo Dockyard PLC to Indian giant Mazagon Dock Shipbuilders Ltd., for $ 53 million. In June 2025, Mazagon entered into an agreement with Onomichi and Colombo Dockyard involving a proposed investment of $ 53 million to obtain a controlling interest in the company.
The SEC approval is in response to the mandatory offer that Mazagon is required to make following the pending Rights Issue of Colombo Dockyard, in terms of the Takeovers and Mergers Code.
Last October, Colombo Dockyard announced plans for a Rs. 13 billion Rights Issue and noted that its major shareholder, Onomichi Dockyard Company Ltd., will not renounce its rights in favour of Mazagon Dock Shipbuilders Ltd., but will refrain from subscribing. The resulting rights entitlement will be allotted to Mazagon subject to shareholder approval by Special Resolution.
The issue will take place on the basis of nine new shares for every two held at a price of Rs. 40 per share, resulting in the issuance of 323,365,158 new shares.
The company said the proceeds are intended to strengthen its financial position and improve working capital in view of the financial constraints it continues to face. The funds are also expected to support ongoing operational and financial obligations.
Yesterday, Colombo Dockyard closed up at Rs. 217, compared to the previous closing price of Rs. 174.
As of end-September 2025, Onomichi Dockyard was the top shareholder with a 51% stake, followed by the Employees’ Provident Fund at 10%. The company reported a net asset value per share of Rs. 8.75 for the same period, down from Rs. 52.41 a year earlier.
The SEC has also deferred a trading suspension on Colombo Dockyard PLC shares to 11 June 2026. The suspension was initially meant to take effect today (11). Colombo Dockyard said the extension is subject to the conditions set out in an SEC letter dated 10 December 2025.
