Business

MTD Walkers’ likely to pay back debenture holders

The investors in MTD Walkers PLC’s Type ‘A’ debentures were left hoping for a swift resolution to the company’s financial woes, as its Rs. 2.1 billion worth of Type ‘A’ debentures awaits retirement today (30).
The debenture, which attracted mostly financial institutions and other institutional investors, matured after its three year specified duration with the balance under Type ‘B’ maturing two years later.
MTD Walkers was caught in a tricky situation, due to the delays in payments, due to it by the Government for infrastructure projects. Total receivables to the company stood at Rs. 23 billion on 30 June, while it had Rs. 29 billion in outstanding borrowings.
Speaking to The Sunday Morning Business on Friday (28), Deputy Treasury Secretary S.R. Attygalla said, that the Treasury had released Rs. 1.5 billion to the Megapolis Ministry and that the Urban Development Authority (UDA), which falls under its purview, would make the necessary payments to MTD Walkers. The Treasury has deposited the monies in the Trustees’ Account. He said the company would receive the payment in due course.
Also speaking to The Sunday Morning Business on conditions of anonymity, a company insider said that MTD Walkers expected to be able to make the required payments in time thanks to the cash inflow.
For much of last week, the investors were on edge fearing the worst case scenario. In a Colombo Stock Exchange filing the company said it was “making every endeavour to meet its obligations” as per the debenture trust deed.
The company’s credit rating was recently downgraded by ICRA, a unit of Moody’s Investors Services, from BB+ (negative) to BB- (negative).
“…. after the reinstatement of the suspended mega construction projects by the new government, tendering activity for new government projects witnessed a significant growth and have resulted in an increased competitive scenario in the construction industry. However, the company is yet to benefit from the turnaround.”
MTD Walkers is a contractor of state-funded infrastructure projects.