Colombo Dockyard launches Rs.12.9bn rights issue

Colombo Dockyard PLC announced plans to raise over Rs.12.93 billion via a rights issue, offering 323.4 million new ordinary voting shares, at Rs.40.00 each, as the shipbuilding and repair company seeks to shore up its financial position and address the operational funding pressures.

The shareholders will be entitled to subscribe for nine new shares for every two shares held, based on the record date to be announced. The proposed issue is subject to regulatory approval from the Colombo Stock Exchange and shareholder consent at a general meeting.

The proceeds from the rights issue are earmarked to strengthen the working capital and ease the liquidity constraints. 

Japan’s Onomichi Dockyard Co. Ltd, the company’s major shareholder, has opted to renounce its full entitlement. In contrast, India’s Mazagon Dock Shipbuilders Ltd has expressed interest in subscribing to any shares left unsubscribed, the company said.

Any fractional entitlements would be pooled and allocated fairly, to ensure full subscription of the issue, the filing noted.