Mazagon Dock Shipbuilders buys controlling stake in Colombo Dockyard

MUMBAI : Mazagaon Dock Shipbuilders has announced the acquisition of a controlling stake in Colombo Dockyard, a Sri Lankan company. As per the exchange filings, the public sector company will acquire at least a 51 percent stake in the Sri Lankan dockyard for Rs 452 crore.

Mazagaon Dock Shipbuilders said that it has signed definitive agreements with Colombo Dockyard’s majority stakeholder, Onomichi Dockyard Co. Further, the company said that, besides the secondary acquisition from stakeholders in Colombo Dockyard, it will also purchase securities of the Sri Lankan company through primary subscription.

Why acquisition is important for Mazagon Dock Shipbuilders
Mazagon Dock Shipbuilders, a Ministry of Defence undertaking, is known for building and maintaining naval vessels ranging from submarines, warships, and cargo vessels to deep-sea research specialty vessels.

Colombo Dockyard, a Colombo Stock Exchange-listed company, is primarily involved in building and maintaining ships with its headquarters at Graving Dockyard, Colombo. The Indian shipbuilding company is looking to expand its operational synergies and market through the acquisition of the Sri Lankan company. The company said in the exchange filing that the acquisition will support its long-term growth vision.

Colombo Dockyard’s financials
Founded in 1974, Colombo Dockyard posted a consolidated turnover of 2544 crore Sri Lankan Rupees or about INR 726 crore in FY24, says the exchange filing documents. In the previous financial year, it reported a turnover of Rs 1029 crore. Mazagon Dock Shipbuilders said that the proposed acquisition is expected to be completed in 4 to 6 months. 

Source : FE