Beleaguered construction group, MTD Walkers PLC entangles in legal issues one by one when Bank of Ceylon (BOC) has announced a legal action against the default on debenture obligations by the company.
BOC said it has handed over the documents pertaining to the matter to the Attorney General’s Department on 24 July in order to institute legal action against MTD Walkers for non-payment of interest due from the company to the investors, leading to an event of default.
The largest lenders to the troubled group include Hatton National Bank PLC, People’s Bank and National Development Bank while there are also other small and medium-sized lenders who have had exposures to the company.
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 were short term. The group further had Rs.8.5 billion worth supplier credit.
Last September, the company deferred settlement of Rs. 2 billion debentures, and approximately Rs.1.1 billion was falling due again in September 2019 and the balance a year later.
The MTD Walkers group’s troubles were largely blamed at the delayed payments by the government for the projects which the firm delivered.
The group had Rs.18 billion receivables from projects and another Rs.1 billion each in cash and financial assets which are believed to be converted in to cash relatively easily.
The Malaysian shareholder of MTD Walkers is yet to sell its 90.8 percent controlling stake of troubled construction company to Sri Lanka’s Anunine Holdings.
The Walkers share has been suspended from trading since February 13, 2019. No such controlling stake transaction took place on December 31 last year.
Anunine Holdings announced that it will buy the shares currently held by MTD Capital Bhd, thereby taking over MTD Walkers and its subsidiaries.
The newcomers took the place of two independent directors linked to Supreme Global Holdings–Kumaragewattage Sharm Viraj Fernando and Yogendraprasath Sathiyaseelan who joined the group at the end of December 2018.
Both resigned after the Colombo Stock Exchange (CSE) rejected a bid by a company allied with Supreme Global to buy the Malaysian stake.
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