Latest news with #ColomboDockyard
Indian Express
4 hours ago
- Business
- Indian Express
Behind Mazagon Dock's Lanka deal: Eye on China, Colombo bailout plea
A strategic move to contain China's expanding footprint in the region, a Sri Lankan SOS for bailout, and a failing Japanese firm — these were among the factors that led to the Indian government-run Mazagon Dock Shipbuilders Limited's decision to acquire a controlling stake in Sri Lanka's Colombo Dockyard PLC under a US$ 52.96 million deal, officials have told The Indian Express. Announcing its decision on Friday, Mazagon Dock Shipbuilders Limited (MDL) had said: 'Located in the Port of Colombo, Colombo Dockyard PLC (CDPLC) gives MDL a strategic foothold in the Indian Ocean Region — a key maritime corridor.' CDPLC, listed on the Colombo Stock Exchange, is the flagship of Sri Lanka's maritime industry and serves a wide spectrum of commercial and governmental clients across Asia, Middle East and Africa. Officials from both the Sri Lankan and Indian governments worked overtime to conclude this strategic deal on Sri Lanka's largest shipyard, said sources. According to officials, CDPLC has been in dire straits for some time. 'Since it is 51% owned by Onomichi Dockyard Company Ltd, they initially sought relief from the Government of Japan, and thereafter from the Government of Sri Lanka. However, neither government could provide any financial relief to them,' an official said. At the end of November 2024, Onomichi Dockyard exited from CDPLC. At this point, officials said, the Sri Lankan government requested the Indian government to encourage Indian investors to look at Colombo Dockyard. 'A default by CDPLC would be serious for the Sri Lankan government as, out of the remaining 49% stake, around 16% is owned by their Employees' Provident Fund. Sri Lanka's insurance fund owns around 9%, Sri Lanka Ports Authority 5% and so on. A default would also have brought great financial distress and uncertainty for the workers employed in Colombo Dockyard,' the official said. 'A few companies, with strong credentials, expressed an interest in CDPLC. As per the due process followed for a listed company, MDL was shortlisted in view of its prowess in shipbuilding as well as its financial strength. Both these aspects are key for the turnover of Colombo Dockyard,' the official said. MDL's net worth, represented by its market capitalisation, is approximately $15.12 billion as of June 25, 2025. The company is almost debt-free. It has reported a turnover of approximately $1.13 billion, according to officials. MDL's decision is expected to significantly change the shipbuilding and ship repair landscape in the region. With CDPLC its first international venture, it is seen as a major milestone in the company's transformation from a purely domestic shipbuilder into a regional maritime player with global aspirations. 'It demonstrates the appetite by Indian industry, including PSUs, to acquire strategic assets overseas and to build investment-led partnerships,' the official said. On the other hand, MDL's controlling stake will serve as a force multiplier for CDPLC, said officials. MDL will bring an order pipeline for CDPLC from both domestic and international market for repairs, refits and new builds, they said. The move is expected to boost the existing revenue stream from the Indian sub-continent's ship repairs. A number of orders for which potential clients are approaching MDL can be diverted to CDPLC, the official said. On sharing of expertise, the official said both the shipyards possess enormous expertise garnered over the past decades. 'This strength can be leveraged for mutual benefit and can result in a win-win scenario,' the official said. The resources available at both the yards can be shared for mutual benefit. 'For instance, the detailed design capabilities possessed by both the yards can be leveraged for projects at MDL as well as at CDPLC,' the official said. CDPLC, which is currently under financial distress, can benefit from MDL's strong financial capabilities, thereby expediting the turnaround process. CDPLC will now be in a position to secure contracts which it missed earlier due to poor financial health, the official said. In a regulatory filing, the Mumbai-headquartered shipbuilder said the proposed acquisition would enable the company to strengthen its position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach. 'It supports the company's long-term growth vision in the shipbuilding and ship repair industry,' it said. The move comes amid concerns in New Delhi over Beijing's persistent attempts to expand its strategic influence in the island nation. China Merchants Port Holdings holds an 85% stake in Hambantota International Port Group (HIPG) and secured a 99-year lease on the Hambantota International Port (HIP) in Sri Lanka in 2017. In July 2024, CDPLC and HIPG signed an agreement to set up a full-fledged workshop at HIP. Shubhajit Roy, Diplomatic Editor at The Indian Express, has been a journalist for more than 25 years now. Roy joined The Indian Express in October 2003 and has been reporting on foreign affairs for more than 17 years now. Based in Delhi, he has also led the National government and political bureau at The Indian Express in Delhi — a team of reporters who cover the national government and politics for the newspaper. He has got the Ramnath Goenka Journalism award for Excellence in Journalism '2016. He got this award for his coverage of the Holey Bakery attack in Dhaka and its aftermath. He also got the IIMCAA Award for the Journalist of the Year, 2022, (Jury's special mention) for his coverage of the fall of Kabul in August 2021 — he was one of the few Indian journalists in Kabul and the only mainstream newspaper to have covered the Taliban's capture of power in mid-August, 2021. ... Read More
The Hindu
13 hours ago
- Business
- The Hindu
Mazagon Dock Shipbuilders to buy controlling stake in Colombo Dockyard
Colombo Indian government-owned Mazagon Dock Shipbuilders Limited (MDL) has announced its decision to buy controlling stakes in Sri Lanka's Colombo Dockyard in a $52.96 million deal. The proposed acquisition, MDL's first international venture, would give the Mumbai-based ship building yard 51 % equity in the Sri Lankan PLC that is grappling with persisting losses. A well-known ship repair, ship building, heavy engineering and offshore engineering facility in Sri Lanka, CDPLC has been saddled in debt over the years (over LKR 28 billion, or roughly ₹ 8 billion, in short and long term debt), Sri Lankan business newspaper the Daily Financial Times reported on Saturday (June 28, 2025), terming the Indian company's acquisition 'highly beneficial' for India and Sri Lanka. The transaction is expected to be completed in six months. 🔶#MDL is set to acquire a controlling stake in Colombo Dockyard PLC (CDPLC), Sri Lanka's largest shipyard, in a deal worth up to USD 52.96 million. This marks MDL's first international in the Port of Colombo, CDPLC gives MDL a strategic foothold in the Indian… — Mazagon Dock Shipbuilders Limited (@MazagonDockLtd) June 27, 2025 'Located in the Port of Colombo, Colombo Dockyard PLC (CDPLC) gives MDL a strategic foothold in the Indian Ocean Region-- a key maritime corridor,' the MDL said in a statement. Colombo Dockyard was not immediately available for comment. Last year, Japanese company Onomichi Dockyard, which held majority stakes in Colombo Dockyard, decided to exit from the firm. Colombo 'urgently requested' New Delhi to 'encourage Indian investors' to consider investing in Colombo Dockyard fearing the implications of a default, according to official sources from the Indian side. As per the due process followed for a listed company, Mazagon Dock Shipbuilders Ltd was shortlisted based on their experience in shipbuilding and financial strength, the sources said. The development, of an Indian company acquiring controlling stakes at the facility located within the Colombo Port, comes amid New Delhi's preoccupation with apparently growing Chinese outreach in the region. Over the last few years, India raised concern with Sri Lanka multiple times, over Chinese research vessel visits to its ports, prompting Colombo to impose a moratorium on foreign research vessels. President Anura Kumara Dissanayake's government has said it would evolve a new national policy on the visit of foreign vessels. MDL is not the first Indian firm to enter the Colombo Port. In April this year, Adani Ports and Special Economic Zone Limited commenced operations at the Colombo West International Terminal (CWIT) that it is jointly developing with the Sri Lanka Ports Authority and Sri Lankan Conglomerate John Keells Holdings, adjacent to the China-backed Colombo International Container Terminal (CICT) at the Colombo Port.
Mint
13 hours ago
- Business
- Mint
Mazagon Dock's ₹452 crore deal with Sri Lankan shipyard will boost India's maritime power: Here's how
Mazagon Dock Shipbuilders Limited (MDL) picked its first international acquisition with a controlling stake of Colombo Dockyard PLC (CDPLC) in an all-cash deal capped at ₹ 452 crore. The acquisition will strengthen Mazagon's position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach, the defence public sector undertaking said in a regulatory filing. The deal is expected to be completed within 4 to 6 months, with the acquisition being the first instance of an Indian shipyard, both state-owned and private, acquiring a shipyard overseas, according to Moneycontrol. Colombo Dockyard PLC is a publicly listed company in Sri Lanka. It is engaged in the business of shipbuilding and ship repair for over 50 years, the company is listed on the Colombo Stock Exchange. Captain Jagmohan, chairman & managing director (CMD) of Mazagon Dock Shipbuilders Limited told Moneycontrol, "This is not just an acquisition, it is a gateway.' 'It marks our first international foray and reflects our ambition to transform into a global shipbuilding enterprise. With Colombo Dockyard's strategic location, proven capabilities, and strong regional presence, this step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard," he said. An MDL spokesperson also mentioned that the Colombo Dockyard offers Mazagon Dock a strong operational foothold in the Indian Ocean Region (IOR), which is a major maritime corridor in the world. "With this acquisition, MDL positions itself not only to strengthen its presence in the region (IOR) but also to enhance its competitiveness in the global shipbuilding and marine engineering arena," the spokesperson added Colombo Dockyard has been around since 1974 and specialises in manufacturing offshore support vessels, cable-laying ships, tankers, and patrol boats for several countries, including Japan, Norway, France, the UAE, India, and several other African nations. "It is the only shipyard in Sri Lanka that offers services ranging from in-house design and construction to advanced repair and marine steel fabrication," the MDL official said. According to the company financials, Colombo Dockyard reported losses of around ₹ 70.7 crore in 2024. Onomichi Dockyard, which currently controls the company, applied for financial relief from the Japanese and Sri Lankan governments.
Mint
17 hours ago
- Business
- Mint
Mazagon Dock's ₹452 crore deal with Sri Lankan shipyard will boost India's maritime power: Here's how
Mazagon Dock Shipbuilders Limited (MDL) picked its first international acquisition with a controlling stake of Colombo Dockyard PLC (CDPLC) in an all-cash deal capped at ₹ 452 crore. The acquisition will strengthen Mazagon's position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach, the defence public sector undertaking said in a regulatory filing. The deal is expected to be completed within 4 to 6 months, with the acquisition being the first instance of an Indian shipyard, both state-owned and private, acquiring a shipyard overseas, according to Moneycontrol. Colombo Dockyard PLC is a publicly listed company in Sri Lanka. It is engaged in the business of shipbuilding and ship repair for over 50 years, the company is listed on the Colombo Stock Exchange. Captain Jagmohan, chairman & managing director (CMD) of Mazagon Dock Shipbuilders Limited told Moneycontrol, "This is not just an acquisition, it is a gateway.' 'It marks our first international foray and reflects our ambition to transform into a global shipbuilding enterprise. With Colombo Dockyard's strategic location, proven capabilities, and strong regional presence, this step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard," he said. An MDL spokesperson also mentioned that the Colombo Dockyard offers Mazagon Dock a strong operational foothold in the Indian Ocean Region (IOR), which is a major maritime corridor in the world. "With this acquisition, MDL positions itself not only to strengthen its presence in the region (IOR) but also to enhance its competitiveness in the global shipbuilding and marine engineering arena," the spokesperson added Colombo Dockyard has been around since 1974 and specialises in manufacturing offshore support vessels, cable-laying ships, tankers, and patrol boats for several countries, including Japan, Norway, France, the UAE, India, and several other African nations. "It is the only shipyard in Sri Lanka that offers services ranging from in-house design and construction to advanced repair and marine steel fabrication," the MDL official said. According to the company financials, Colombo Dockyard reported losses of around ₹ 70.7 crore in 2024. Onomichi Dockyard, which currently controls the company, applied for financial relief from the Japanese and Sri Lankan governments. The deal with Mazagon Dock Shipbuilders is expected to benefit Colombo Dockyard. "With MDL's support, particularly in technology support, access to Indian supply chains, and entry into Indian and allied maritime markets, Colombo Dockyard can hope for a financial turnaround and long-term growth," an MDL official told The Times of India.
Al Arabiya
20 hours ago
- Business
- Al Arabiya
India's Mazagon Dock Shipbuilders to buy controlling stake in Colombo Shipyard
Indian state-owned Mazagon Dock Shipbuilders said it would buy a controlling stake in Sri Lankan peer Colombo Dockyard in a deal not exceeding $52.96 million to grow its shipbuilding and repair business. The transaction, involving the acquisition of at least 51 percent equity in Colombo Dockyard, will close within six months, after which the Sri Lankan shipbuilder will become a part of Mazagon Dock Shipbuilders, according to a regulatory filing on Friday. Colombo Dockyard was not immediately available for comment outside business hours. Mazagon Dock Shipbuilders also builds warships and submarines, and the deal is seen giving India a strategic foothold in the Indian Ocean island nation where New Delhi and Beijing have been jostling for influence for years. For 2024, Colombo Dockyard's turnover was 25.45 billion Sri Lankan rupees ($84.89 million), according to the filing, while Mazagon Dock Shipbuilders' revenue for the year ended March 2025 was 114.32 billion Indian rupees ($1.34 billion).
