Colombo, Sri Lanka – 02 September 2026 – Millennium Housing Developers PLC (MHDL) has disclosed a comprehensive plan of remedial actions aimed at addressing the Emphasis of Matter on Going Concern (EMGC) raised by its independent auditors. This significant update, shared with the Colombo Stock Exchange (CSE) on September 1, 2026, outlines a multi-faceted strategy designed to strengthen the company’s financial position, boost cash flow, and enhance investor confidence.
Background to the Going Concern Emphasis
The company’s securities were transferred to the CSE Watch List with effect from December 7, 2023, following the Independent Auditor’s Report for the year ended March 31, 2023, which contained an Emphasis of Matter on Going Concern. This concern has been reiterated by the auditors in their reports for the subsequent financial years ending March 31, 2024, and March 31, 2025, signalling persistent challenges in the company’s ability to continue as a going concern without significant intervention.
In response, MHDL and its Group have meticulously developed and initiated a series of strategic interventions, targeting key operational and financial areas.
MHDL’s Strategic Remedial Actions
1. Cash Flow Support and Revenue Growth from Katunayake River View Project
A cornerstone of MHDL’s strategy is the acceleration of the Katunayake River View Project. With the full settlement of the associated bank facility and the release of the mortgage bond, the company is poised to expedite the sale of its remaining inventory. This move is expected to significantly improve cash flow and liquidity. For the year ending March 31, 2027, MHDL projects approximately LKR 676 million in revenue from this project.
- During the first quarter of FY2026/27, LKR 182.69 million in revenue was recognized.
- An additional LKR 38.39 million was recognized up to August 2026 in the second quarter, bringing the total recognized revenue for the first five months of FY2026/27 to LKR 221.08 million.
- Advance customer collections in August 2026 generated LKR 44.28 million, anticipated to result in LKR 109.21 million in revenue upon performance obligation satisfaction.
- The project is on track for completion by March 31, 2027, with an expected LKR 345.75 million in further cash inflows and LKR 454.92 million in revenue recognition over the remaining period.
2. Land Development Projects – Diversification and Growth
As part of its business diversification strategy, MHDL plans to launch new land development projects between October 2026 and March 2027. Land parcels have been identified in strategic locations such as Negombo, Gampaha, and Piliyandala (a 74-perch plot), with negotiations, feasibility studies, and survey work currently in progress. These projects are expected to accelerate revenue recognition and fortify financial stability.
3. Upcoming High-Rise Development in Nawala
Millennium Housing Limited, a wholly-owned subsidiary (Registration No. PB 366), is set to launch a significant high-rise apartment project in Nawala. A development agreement valued at LKR 162.85 million was executed with related party Ceyoka (Pvt) Ltd on September 30, 2025, for a project with an overall value exceeding LKR 2.1 billion. Construction, though delayed due to Urban Development Authority (UDA) approvals, is scheduled for 2026, with a presale launch planned immediately after the groundbreaking ceremony.
4. Battaramulla (Subhuthipura) Land Sale
MHDL is in advanced negotiations to dispose of a prime land parcel in Battaramulla, with anticipated proceeds ranging from LKR 450-500 million. These funds will primarily be utilized to settle the outstanding facility secured against the property, with excess funds redirected to new land development projects. The transaction is expected to conclude in the fourth quarter of the current financial year, with final sale agreements projected within 2026.
5. The Heights Residential Apartment Complex in Rajagiriya
The premium “Heights” project in Rajagiriya, envisioned as a 14-floor residential development featuring 88 apartments on 80.29 perches of freehold land, represents a substantial future revenue stream. With a forecasted cost of LKR 4.715 billion and an estimated revenue potential of LKR 6.355 billion, the project has completed pile foundation works. Superstructure construction is slated to commence around June 2027, contingent upon obtaining the remaining mandatory approvals.
Compliance with CSE Watch List Requirements
MHDL remains committed to transparency regarding its Watch List status. The company has made further disclosures in terms of CSE Rule 7.5(d)(ii)(A)(5)(d), outlining the implications:
- Any deviation from the proposed remedial actions will be communicated to investors via a market announcement within one market day of Board approval.
- According to CSE rules, if the emphasis of matter on going concern is not resolved within 15 months from the date of transfer to the Watch List (December 7, 2023, implying by March 2025), trading of the company’s securities shall be suspended. If such suspension continues for more than 12 months, delisting by the CSE Board of Directors would follow in terms of Rule 14 of the Listing Rules. Given the auditors have emphasized the matter for FY2024 and FY2025, the company faces stringent regulatory scrutiny.
- Should the matters giving rise to the EMGC be resolved and independently verified by auditors while on the Watch List, this resolution will be announced to the market forthwith.
Millennium Housing Developers PLC is demonstrating a proactive and detailed approach to navigating its current financial challenges. The successful execution of these strategies will be crucial in restoring long-term financial stability and confidence among its stakeholders and the broader Sri Lankan real estate market.
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