Mazagon in negotiations to acquire controlling stake in CDPLC

It is reported that Mazagon Dock Shipbuilders Ltd (MDL) from India is in advanced negotiations to acquire a controlling stake in financially troubled Colombo Dockyard PLC (CDPLC).

Mazagon Dock Shipbuilders Ltd is on track to acquire a majority stake in Colombo Dockyard PLC, Sri Lanka’s leading shipbuilder, by purchasing 51% from Japan’s Onomichi Dockyard Co. Ltd. A Memorandum of Understanding (MoU) is expected by the end of April, solidifying the deal.

Colombo Dockyard, listed on the Colombo Stock Exchange, has been facing severe financial challenges, reporting losses of Rs 2.48 billion in 2024 and escalating liabilities of Rs 38.28 billion. Despite setbacks, the company plays a crucial role in ship repairs and aims to expand its expertise into high-value shipbuilding and offshore engineering.

Mazagon Dock, primarily a defence shipbuilder, is positioning itself as a frontrunner after previous bids from a UAE-based company and Sri Lankan firms fell through. The deal is strategically important for India, reinforcing its maritime influence while countering China’s growing presence in Sri Lanka’s infrastructure.

The acquisition could bring a much-needed financial boost to Colombo Dockyard, creating jobs and attracting investment. However, trade unions have voiced concerns over job security and management changes. Onomichi Dockyard has been seeking an exit, and discussions are reportedly progressing swiftly, though the final decision remains with the Japanese firm.