MTD in talks to sell stake at shipyard
Listed construction firm MTD Walkers PLC (MTD) is negotiating to sell a strategic stake in its shipyard, Walkers Colombo Shipyard Ltd to inject capital into the firm, company officials said.
The company secured a US$4 million loan from the Asian Development Bank last December to infuse cash into the shipyard, but it hasn’t still been disbursed due to the company not adhering to certain conditions, according to the officials. “Also there are better offers (for the shipyard) on the table by other financial institutions which we are evaluating along with other options,” a company official told the Business Times.
In a response to the Colombo Stock Exchange (CSE) that queried on August 31 on unusual trading in its shares, the company said that it has not engaged in any undisclosed price sensitive business activities or transactions to escalate the share price, and do not have any knowledge of the reasons for such an increase in the price of the share and the volume of shares traded as intimated by the CSE.
MTD is plagued with sharp losses and most recently an image loss owing to a loan exposure to People’s Bank which is a large loan issued by the bank that saw the company’s CFO resigning. Also questions were raised on a conflict of interest as MTD’s Executive Deputy Chairman is a Senior Director at PB.
Malaysian MTD Capital Bhd has 90.7 per cent in MTD. MTD Capital underwent a management change recently with a new appointment at Group CEO level. This change also saw MTD’s parent conducting an internal audit which precipitated in certain officials resigning – amongst them the CFO.
MTD reported a net loss in the quarter ended June by 14 per cent year on year to Rs 624 million. The company official noted that prevailing shortage of skilled labour resulted in MTD not being able to achieve its usual productivity levels, ensuing in project delays and increased project and finance costs.