Details have emerged of the closed door meetings and last gasp efforts made by MTD Walkers over the second half of last week to pay back its debenture holders on time, before it finally decided to request an extension on the maturity date of the debenture. The cash-strapped construction company was left scrambling to pay back holders of its Rs. 2.1 billion worth of Type ‘A’ debentures which was set to mature on Sunday (30) owing to the delays in payments due to it by the Government for infrastructure projects. As late as Friday afternoon, the plan was to make the necessary payments by securing the outstanding payments from the Government. 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 from the Government. Furthermore, in a Colombo Stock Exchange filing the company said it was “making every endeavour to meet its obligations” as per the debenture trust deed. However, later in the evening a calculated decision to pursue an extension was taken by the management. Earlier in the week MTD Walkers had requested the Treasury for a payment of Rs. 1.7 billion which it was owed only to be told that the Treasury was capable of paying Rs. 1.5 billion, but not the additional $ 200 million, calling into question the financial health of the country. 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 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 in due course. The Treasury had deposited the monies in the Trustees’ Account. Thereafter, in accordance with clause 21.1 of the Trust Deed dated 22^nd July 2015 the consent of the Debenture Holders who hold more than three fourth (3/4^th)of the par value of the Debentures were obtained to change the Date of Redemption on the type A Debentures from three years from the ‘Date of Allotment’ (30^th September 2018) to four years. In return MTD Walkers agreed to change the Rate of Interest of the Type A Debentures from 9.75% per annum to 11.75% per annum upto maturity and in the Rate of Interest of the Type B Debentures from 10.25% per annum to 12.25% per annum up to maturity with effect from 1^st October 2018. In a Colombo Stock Exchange filing MTD Walkers said that the reason for the extension was “to better align the Company’s debt obligations with the cash flows from its ongoing projects.” The company’s credit rating was recently downgraded by ICRA, a unit of Moody’s Investors Services, from BB+ (negative) to BB- (negative). Assigning the rating ICRA noted, “.... 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.