SEC defers Colombo Dockyard suspension as India’s  Mazagon Dock set for takeover

By Nishel Fernando

Colombo Dockyard PLC (CDL) has secured a critical six-month extension on the trading of its shares, averting an immediate suspension as it finalises a strategic takeover by India’s Mazagon Dock Shipbuilders Limited.

The company announced on Wednesday that the Securities and Exchange Commission of Sri Lanka (SEC) has granted a deferment of the trading suspension - originally slated for December 11, 2025 - until June 11, 2026. 

The potential suspension was linked to the company’s non-compliance with Listing Rules regarding its continued presence on the ‘Watch List’ since June 2024, a status triggered by an “Emphasis of Matter on Going Concern” as in its audited financial statements.

In a parallel development crucial to the company’s survival, CDL confirmed that the SEC has approved the transfer of the controlling stake. The regulator has authorised the current controlling shareholder, Onomichi Dockyard Company Limited, to sell its entire shareholding to Mazagon Dock Shipbuilders Limited. This transaction is set to occur in response to a Mandatory Offer that Mazagon will make following the completion of the Company’s pending Rights Issue.

In a further clarification issued this week, CDL emphasised that SEC’s approval for the share transfer is conditional upon Mazagon successfully completing the Rights Issue and subsequently making a mandatory offer to all remaining shareholders in strict compliance with the Takeovers and Mergers Code.

The shipbuilder has navigated a turbulent period marked by the withdrawal of Onomichi from the company’s management in late 2024 following severe setbacks caused by the pandemic and Sri Lanka’s economic instability. These macroeconomic factors had severely impacted the company’s ability to secure financial facilities for international bidding. Following a comprehensive evaluation of potential investors, CDL entered into an agreement with Mazagon to infuse significant capital and technical expertise to revive the operation.

Despite the corporate restructuring, the dockyard has maintained operational resilience, successfully delivering the third vessel of a hybrid bulk carrier series to a Norwegian client ahead of schedule on November 27, 2025. 

The company also noted that construction on the fourth vessel in the series is progressing as planned, with a launch scheduled for the end of this month. Furthermore, CDL recently signed contracts to design and build two Cable Laying & Repair Vessels for Orange Marine, pending the fulfillment of specific financial conditions.