Mazagon Dock Shipbuilders (MDL) has agreed to acquire a controlling 51% stake in Sri Lanka's largest and most established shipyard Colombo Dockyard for a consideration of Rs 452 crore, the city-based state-run shipbuilder said.
"Mazagon Dock has announced a significant step in its strategic evolution with the approval of a proposed acquisition of a controlling 51% stake in Sri Lanka's largest and most established shipyard Colombo Dockyard PLC. The investment, valued at up to $52.96 million, will be carried out through a combination of primary infusion and secondary share purchase, including the acquisition of shares from the Japanese owner Onomichi Dockyard Co, the current majority shareholder," MDL said in a statement Friday.
This marks MDL's first international foray and is a major milestone in the company's transformation from a purely domestic shipbuilder into a regional maritime player with global aspirations, the statement added.
Strategically located within the Port of Colombo, Colombo Dockyard offers MDL a strong operational foothold in the Indian Ocean region--one of the busiest and most geopolitically significant maritime corridors in the world.
Mazagon Dock has its facilities in the eastern sea front in south Mumbai builds frontline warships and submarines and has played a pivotal role in the Navy’s modernization drive.
The publicly traded Colombo Dockyard 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.
Upon the deal completion, subject to customary regulatory approvals and closing conditions, the Colombo Dockyard will become a subsidiary of MDL.
The move assumes significance amid the increasing assertiveness of Chinese in the Indian Ocean region and its presence in India's neighbourhood.
"This is not just an acquisition, it is a gateway. It marks our first international foray and reflects our ambition to transform into a global shipbuilding enterprise. With Colombo Dockyard's strategic location, proven capabilities, and strong regional presence, this step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard," said Capt Jagmohan, chairman and managing director of MDL.
Colombo Dockyard has more than five decades of experience in shipbuilding, ship repairs, and heavy engineering. It has a track record of delivering complex offshore support vessels, cable-laying ships, tankers, and patrol boats for clients across Japan, Norway, France, the UAE, India, and several African nations. It is the only shipyard in the island nation offering an integrated portfolio of services ranging from in-house design and construction to advanced repair and marine steel fabrication.
Colombo Dockyard operates four drydocks and multiple berths capable of handling vessels up to 125,000 DWT. In addition to its technical strengths, the dockyard is actively pursuing a pipeline of orders exceeding $300 million, which includes cable laying ships, multi-purpose utility ships, and new-build fleet support vessels.