February 15, 2019 (LBO) – Continuing its seemingly endless spiral into the inevitable abyss, CSE listed construction firm MTD Walkers (KAPI) reported a loss of approximately Rs1.5bn for the quarter ended December 2018. Loss for the 9 months was well over Rs3bn after losses of over Rs2bn during the corresponding period in the prior year.
KAPI is left with only equity of Rs1.35bn having retained losses totalling Rs5.5bn on the balance sheet. This small amount of equity is supporting a balance sheet with liabilities in excess of Rs38bn, indicating that the company is likely teetering on the verge of a total collapse.
Moves have been afoot for a new investor to come in and take over the company, however those moves were blocked by an enjoining order in the Commercial High Court on application by several of Sri Lanka’s largest banks to whom the firm is in default.
A Hayleys (HAYL) subsidiary has also filed a winding up action against KAPI according to reporting by the DailyFT.
The woes of MTD Walkers are likely to be present throughout the construction industry which is being plagued by delayed payments and bad debts. Firms who are dealing with government contracts have also historically been hotbeds of waste and corruption.