MTD Walkers PLC takeover bid swings towards billionaire businessman
One of Sri Lanka’s oldest colonial era construction company MTD Walkers PLC later diversified as Walkers CML Group will be realigning its operations under a new management headed by a local investor who has stepped into make capital infusion amounting to billions of rupees, company officials said.
The 165-year-old company has become a victim of the delayed and non-payment of dues by the government for mega construction projects and the generally poor sentiment in the country’s construction sector
It has been beleaguered by financial crisis reporting losses of over Rs. 6 billion in total for the financial years ended March 2018 and 2019.
The firm has defaulted on payments of listed debentures and it has been embroiled in litigation with several local banks.
The Colombo Stock Exchange (CSE) has suspended share trading on February 13. Separately, the Commercial High Court issued enjoining orders in favour of eight banks, restraining MTD Walkers PLC from transferring any of its shares in any of its subsidiaries to its Malaysian parent company until it settles billions of rupees in debt to the lenders.
According to the latest financial report available up to December 31, 2018, the company had been sitting on a Rs.26 billion debt pile, of which Rs.22 billion was short term. The group further had Rs.8.5 billion worth supplier credit. Billionaire businessman Ravi Wijeratne, Chairman-owner of conglomerate Rank Holding who is also a director of Walkers CML Group, has agreed with MTD Capital Bhd of Malaysia to purchase a majority stake.
The buy over of 152,183,583 ordinary voting shares of the company constituting 90.78 per cent shares will be through a voluntary offer to be made to all the shareholders of the company.
Mr. Wijeratne told the Business Times he has made this decision to resurrect the company anticipating the support of banks and relevant state agencies to safeguard one of the oldest and largest construction firm and its 4000 strong work force.
He expressed the belief that construction companies like MTD Walkers could play a vital role in local construction industry which will be booming within the next 10 years following avenues created by mega projects such as Colombo Port City.
“Right now, there are options for businesses and investors to become a part of a construction industry that’s set to be the largest in the island, just a few years from now,” he said.
With presidential and general election on the way, the newly elected government will be focusing attention on housing and infrastructure development across the country, he said.
Earlier two investors made attempts to buy the majority stake of the company after negotiations with the Malaysian company but it hasn’t materialised, he added.
These Indian and Japanese investors who took up the challenge of giving a face-lift to the company infusing US$25 million has backed off from the deal following the ongoing debt recovery action being taken by several banks, against the listed corporate.