Colombo Dockyard alters rights issue terms

• Onomichi to cede shares to Mazagon

Colombo Dockyard yesterday disclosed it would proceed with its planned Rs.12.93 billion rights issue, once the shareholder approvals are obtained but announced a change in the transaction structure.

In a stock exchange filing, the shipbuilding and repair company said its major shareholder Onomichi Dockyard Company Limited would no longer renounce its rights in favour of Mazagon Shipbuilders Limited, as previously stated.

Instead, Onomichi will refrain from subscribing to its rights entitlement and the resulting ordinary voting shares will be directly allotted to Mazagon, subject to approval by the shareholders through a special resolution. The company said the ordinary voting shares linked to Onomichi’s entitlement would not be allotted to the existing shareholders who apply for additional shares and would be reserved solely for Mazagon.

The board of directors approved the revised procedure on October 1.

Colombo Dockyard first announced the rights issue in July, offering 323.4 million new ordinary voting shares, at Rs.40 each, on the basis of nine new shares for every two held, to strengthen the working capital and ease liquidity pressures. The issue was later postponed in August, due to unavoidable circumstances.