Mazagon Dock Shipbuilders To Acquire Controlling Stake In Colombo Dockyard PLC
Mumbai:
State-run Mazagon Dock Shipbuilders Limited (MDL) has decided to acquire a controlling stake in Sri Lanka's Colombo Dockyard PLC under a USD 52.96 million deal, a move that is expected to expand India's strategic presence in the island nation.
MDL's decision marks its first international venture and is seen as a major milestone in the company's transformation from a purely domestic shipbuilder into a regional maritime player with global aspirations.
"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.
Officials said MDL's acquiring controlling stakes in CDPLC will significantly change the shipbuilding and ship repair landscape in the region.
The MDL will bring an order pipeline for CDPLC from both domestic and international markets for repairs, refits and new builds, they said.
As such there is a continuous revenue stream of ship repairs from the Indian sub-continent and MDL acquiring controlling stakes would only further this trend, they said.
The move comes amid concerns in New Delhi over China's persistent attempts to expand its strategic influence in the island nation.
Colombo Dockyard PLC, 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, the Middle East, and Africa.
It is Sri Lanka's largest shipyard.
"The investment, valued at up to USD 52.96 million, will be carried out through a combination of primary infusion and secondary share purchase, including the acquisition of shares from Onomichi Dockyard Co Ltd, the current majority shareholder," the readout said.
A number of orders for which potential clients are approaching MDL can also be diverted to CDPLC which will ensure that there is a supply chain and industrial connectivity, the officials cited above said.
They said both the shipyards possess enormous expertise garnered over the past decades and this strength can be leveraged for mutual benefit and can result in a win-win scenario.
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 CDPLC which is currently under financial distress can benefit from MDL's strong financial capabilities and resource base thereby expediting the turnaround process, the officials said.
The MDL can leverage its resources for augmentation of the operations of CDPLC and its subsidiaries in other ports of the country based on opportunities that may arise, they added.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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