After losing money due to a currency crisis brought on by central bank rate cuts, Colombo Dockyard Plc of Sri Lanka stated that it is “actively seeking” possible partners who can guarantee its long-term viability.
“The Board of Directors is actively seeking potential investors who can revitalize the company and ensure its long-term sustainability, given the financial distress the company is facing,” the company wrote in a letter to the Colombo Stock Exchange.
“The company wants to get an investment that will help it get through this challenging time and support its growth and success in the future.”
“The Board of Directors is dedicated to openness and will notify the market of any noteworthy advancements in this pursuit of strategic investment.”
Following a going concern warning expressed by the company’s auditors in the most recent financial statements, Colombo Dockyard was updating the market on its progress.
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Due to delays and cost increases during the COVID pandemic and subsequent financial problems, the company encountered difficulties after failing to deliver the cable laying vessels.
The company entered the cable laying business with a low bid.
Dockyard reported that it was still making money from its ship repair operations.
Additionally, the business was contracted to construct four hybrid bulk carriers at a “competitive price point” for Misje Eco Bulk AS of Norway. They were building.
“Expanding its business ventures into a higher price point” was the goal of Colombo Dockyard.
According to the company, it has landed an engineering assignment in the Maldives.
It was pursuing “preferential funding options” and had set up credit lines with banks.
Bank financial guarantees and working capital credit lines are necessary for large contracts.
Dockyard stated that after being placed on a CSE watchlist, it will endeavor to finish the corrective measures within a year. Any discrepancies would have to be reported within a day of the market.
Trading will be halted if the issues are not settled within 15 months of being added to the watchlist. The monthly statement said that the stock could be delisted in accordance with CSE regulations following a 12-month suspension.
