9 October 2019 12:01 am
MTD Walkers PLC, a construction major mired in losses, yesterday informed the Colombo Stock Exchange that one of its creditors has obtained an enjoining order preventing them giving effect to a recent voluntary offer made to buy its controlling stake from the Malaysian parent.
Commercial Bank of Ceylon PLC has obtained an enjoining order from the Commercial High Court of Colombo on September 26 against MTD Walkers PLC and its Malaysian parent, MTD Capital Bhd.
One-time MTD Walkers non-executive director Ravi Wijeratne on September 9 made a voluntary offer to buy the controlling stake of MTD Walkers by purchasing over 152 million MTD Walkers shares from the parent MTD Capital, which represents 91 percent of the company’s issued shares.
Wijeratne said the offer would be made in terms of the Company Takeovers and Mergers Code 1995 (as amended).
Wijeratne is the Chairman of Rank Group of Companies, which has diverse interests in real estate development, finance, logistics, solid waste management, hydropower and wind energy and entertainment. He owns the largest dry port in Sri Lanka, namely Rank Container Terminals Limited.
He has successfully operated Sri Lanka’s largest casino for over 18 years.
The September 26 enjoining order however prevents the deal to proceed “without obtaining the prior approval of the plaintiff” i.e. the Commercial Bank of Ceylon PLC, “until the first defendant (MTD Walkers) has fully paid its dues under the financial facilities under agreement ‘C1’ pending the interim injunction inquiry,” a disclosure issued by MTD Walkers PLC said.
MTD Walkers, which has liabilities over Rs.36.7 billion, had a net asset value per share of Rs.1.95 as at June 30, 2019 interim accounts, sharply down from the book value of Rs.8.03 three months ago.
The firm also had interest bearing borrowings to the tune of Rs.20.5 billion under current liabilities, down from Rs.21 billion in March.