Colombo Dockyard PLC (CDL), Sri Lanka’s pioneering shipbuilding and repair company, is seeking a new strategic investor as its majority shareholder, Japan’s Onomichi Dockyard Company Ltd., prepares to divest its 51% stake and end its management agreement. The announcement marks the end of a three-decade partnership, with Onomichi expressing readiness to exit upon identifying a committed investor. Preliminary discussions with interested parties are already underway, offering a lifeline to the beleaguered company.
CDL is navigating a severe financial crisis, recording its worst performance in 2023 with losses totaling Rs. 11 billion. Retained losses now stand at Rs. 7.5 billion, and revenue for the first nine months of FY24 has dropped by 35%. However, the company managed a silver lining with export revenues of Rs. 31.7 billion in 2023, a 36% increase from the previous year. Key export markets include Norway, India, and France, which collectively contributed a significant portion of this revenue.
Founded 50 years ago, CDL has evolved from building harbor support vessels to constructing complex ships and undertaking advanced engineering projects. Despite its achievements, the company has faced compounding setbacks from Sri Lanka’s financial crisis, the COVID-19 pandemic, and the Easter Sunday attacks. Managing Director and CEO Thimira S. Godakumbura acknowledged these challenges, emphasizing the resilience CDL has shown amid adversity.
Leadership changes are underway following Onomichi’s decision, with its board representatives stepping down and long-serving director L. Ganlath assuming the role of Non-Executive Chairman. The CDL Board has urged investors to avoid speculation, warning that no terms have yet been finalized with potential new investors.
