A six month regulatory reprieve gives Colombo Dockyard vital breathing space as an Indian state owned shipbuilding giant prepares to step in with capital, control, and revival plans.
Colombo Dockyard PLC has secured a crucial six month extension to continue trading its shares, avoiding an immediate suspension as it moves closer to a strategic takeover by India’s Mazagon Dock Shipbuilders Limited.
The company confirmed that the Securities and Exchange Commission of Sri Lanka has deferred the suspension of Colombo Dockyard shares, which was initially scheduled for December 11, 2025, until June 11, 2026. The decision provides the shipbuilder with temporary relief as it works to complete a major ownership transition and financial restructuring.
The possible suspension arose from Colombo Dockyard’s prolonged placement on the Colombo Stock Exchange Watch List since June 2024. This status followed an “Emphasis of Matter on Going Concern” highlighted in the company’s audited financial statements, which placed the firm in breach of Listing Rules governing continued trading eligibility.
In a parallel development critical to the company’s future, Colombo Dockyard announced that the SEC has approved the transfer of its controlling stake. The regulator has authorised Japan’s Onomichi Dockyard Company Limited, the current controlling shareholder, to divest its entire shareholding to Mazagon Dock Shipbuilders Limited. This transfer will take place after the completion of Colombo Dockyard’s pending Rights Issue and the subsequent Mandatory Offer to shareholders by Mazagon.
In a further clarification, the company stressed that SEC approval is conditional. Mazagon must successfully complete the Rights Issue and make a mandatory offer to remaining shareholders in full compliance with the Takeovers and Mergers Code before the share transfer can be finalised.
Colombo Dockyard has endured a prolonged period of financial strain following the withdrawal of Onomichi from management in late 2024. The company faced severe challenges stemming from the global pandemic and Sri Lanka’s economic crisis, which significantly weakened its ability to secure financial facilities for international shipbuilding bids. After evaluating several potential investors, Colombo Dockyard entered into an agreement with Mazagon to inject fresh capital and technical expertise to stabilise and revive operations.
Despite these challenges, the dockyard has continued operations without interruption. The company successfully delivered the third vessel in a hybrid bulk carrier series to a Norwegian client ahead of schedule on November 27, 2025. Construction of the fourth vessel in the series is progressing as planned, with launch expected by the end of the month.
Colombo Dockyard also confirmed that it has signed contracts to design and build two Cable Laying and Repair Vessels for Orange Marine, subject to the fulfillment of specific financial conditions.
