Mazagon Dock Shipbuilders Ltd (MDL) from India is reportedly in advanced negotiations to acquire a controlling stake in financially troubled Colombo Dockyard PLC (CDPLC). MDL is on track to purchase a majority stake of 51% from Japan’s Onomichi Dockyard Co. Ltd, solidifying the deal with a Memorandum of Understanding (MoU expected by the end of April. Colombo Dockyard, facing severe financial challenges with reported losses of Rs 2.48 billion in 2024 and escalating liabilities of Rs 38.28 billion, plays a crucial role in ship repairs and aims to expand its expertise into high-value shipbuilding and offshore engineering.
Mazagon Dock, primarily a defense shipbuilder, is strategically positioning itself as a frontrunner in the acquisition after previous bids from a UAE-based company and Sri Lankan firms fell through. The deal is important for India, reinforcing its maritime influence and countering China’s growing presence in Sri Lanka’s infrastructure. The acquisition of CDPLC could bring a much-needed financial boost, creating jobs and attracting investment, though concerns from trade unions have been raised regarding job security and management changes.
The acquisition of Colombo Dockyard by Mazagon Dock Shipbuilders Ltd is seen as a strategic move to bolster India’s maritime standing and compete against China’s influence in Sri Lanka. Despite facing financial challenges, CDPLC plays a significant role in ship repairs and aims to expand into high-value shipbuilding and offshore engineering. With negotiations progressing swiftly, the deal is poised to bring much-needed investment and job opportunities to CDPLC, although concerns over job security and management changes have been raised by trade unions. The final decision still rests with Onomichi Dockyard Co. Ltd, the current majority stakeholder in CDPLC.
