October 8, 2019 (LBO) – Colombo Stock Exchange (CSE) listed construction firm MTD Walkers (KAPI), in a stock exchange disclosure, informed the marketplace that they have received an order from the Commercial High Courts of Colombo.
The order enjoined the company, or its holding company MTD Capital Bhd, from going through with an earlier disclosed transaction to sell the company to controversial casino operator Ravi Wijeratne.
The order prevents the sale of the firm without approval by Commercial Bank until all outstanding dues to Commercial Bank are settled. Commercial Bank is one of several banks with large credit exposures to the troubled construction company.
KAPI has lost billions of rupees over the years, causing its equity base to be almost completely wiped out. They have defaulted on listed debentures, and their businesses are grinding to a halt.
As of the end of the June 30, 2019 quarter, KAPI is supporting a balance sheet with assets of Rs37bn on just Rs100mn worth of equity. The collapse of MTD Walkers is likely to be one of the largest corporate failures in the history of Sri Lanka. The company has accumulated losses of over Rs6bn to date.