Colombo Dockyard sees Japan’s Onomichi step back; seeks new investor

• Colombo Dockyard has been battling a deepening financial crisis due to a mix of internal and external pressures  
• Board points to strategic location and long-term business potential as key factors that could help turn things around
• Preliminary discussions are ongoing with several parties to find new investor
• Onomichi ready to sell its shares to an investor willing to back company’s recovery

Colombo Dockyard PLC is preparing for a major shift after Japan’s Onomichi Dockyard Company Limited, its majority shareholder, stepped away from the management this week, to allow the company to bring in a new strategic investor.

As part of this decision, Onomichi’s nominees to the board: T. Nakabe, K. Kobatake and J. Furukawa, resigned on December 6, 2024. To ensure continuity, long-standing Director L. Ganlath, who has served on the board since 1993, has been appointed as Non-Executive Chairman.

Colombo Dockyard has been battling a deepening financial crisis, due to a mix of internal and external pressures.  

“The board of directors remains confident that it will be able to steer the company out of the present crisis, with the support and cooperation of its many stakeholders,” the company said in a disclosure.

The shipbuilder pointed to its strategic location and long-term business potential as key factors that could help turn things around. The board acknowledged the urgent need for a new investor, noting, “Preliminary discussions are ongoing with several parties for this purpose.” 

Onomichi is ready to sell its shares to an investor willing to back the company’s recovery, the board added.

Colombo Dockyard has already updated its key creditors about Onomichi’s planned exit and assured them of the board’s commitment to continue operations with a new partner. Creditors have, in turn, assured support, the disclosure said.

In a caution to the investors, the board advised against speculation on the company’s shares, emphasising that discussions are still in early stages. 

“There is no certainty whatsoever as yet on the finality of an entry of a new investor or even more so, the terms and conditions on which such engagement could be entered into,” the disclosure noted.