Colombo, Sri Lanka – 02 October 2026 – Millennium Housing Developers PLC (MHDL), a prominent player in Sri Lanka’s real estate sector, has disclosed a comprehensive plan of remedial actions aimed at addressing the recurring “Emphasis of Matter on Going Concern” (EMGC) in its Independent Auditor’s Reports. The announcement, made to the Colombo Stock Exchange (CSE) on October 1, 2026, details a multi-pronged strategy to enhance cash flow, accelerate revenue recognition, and strengthen the company’s overall financial position.
MHDL’s securities were transferred to the CSE Watch List on December 7, 2023, following an EMGC in the auditor’s report for the financial year ended March 31, 2023. The company has revealed that this emphasis has persisted in subsequent auditor’s reports for the years ended March 31, 2024, March 31, 2025, and March 31, 2026, underscoring the urgency of the outlined measures.
Strategic Remedial Actions to Address Going Concern
The company has identified five key areas of intervention, each with specific timelines and projected financial impacts:
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Cash Flow Support and Revenue Growth from Katunayake River View Project:
Following the full settlement of the bank facility and the release of the mortgage bond on the Katunayake Project, MHDL is accelerating the sale of its remaining inventory. The company projects revenue of approximately LKR 676 million for the financial year ending March 31, 2027. Of this, LKR 228.47 million has already been recognized in the first six months of FY2026/27, with an additional LKR 14.66 million in cash inflows generated in September 2026 through advance collections. The project is on track for completion by March 31, 2027, with a further LKR 345.75 million in cash inflows and approximately LKR 447.58 million in revenue expected.
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Land Development Projects – Diversification and Growth:
MHDL is diversifying its portfolio by initiating new land development projects between October 2026 and March 2027. Land parcels have been identified in Negombo, Gampaha, and Piliyandala, with feasibility studies and negotiations currently underway. These projects are expected to generate new revenue streams and bolster financial stability upon commencement of sales.
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Upcoming High-Rise Development in Nawala:
Millennium Housing Limited, a fully-owned subsidiary, is launching a high-rise apartment project in Nawala. A development agreement valued at LKR 162.85 million was executed with Ceyoka (Pvt) Ltd on September 30, 2025, for a project with an overall value exceeding LKR 2.1 billion. Construction, initially delayed due to UDA approvals, is scheduled to commence during 2026, with pre-sales planned immediately after the groundbreaking ceremony.
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Battaramulla (Subhuthipura) Land Sale:
The company 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 be primarily used to settle the outstanding facility secured against the property, with excess allocated to new land development projects. The transaction is expected to conclude in the fourth quarter of the current financial year, with final sale agreements anticipated within 2026.
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The Heights Residential Apartment Complex in Rajagiriya:
This premium 14-floor, 88-apartment development in Rajagiriya, with a forecasted cost of LKR 4.715 billion and an estimated revenue potential of LKR 6.355 billion, has completed its pile foundation works. Superstructure construction is scheduled to commence around June 2027, pending the acquisition of remaining mandatory approvals.
CSE Compliance and Future Outlook
MHDL has reiterated its commitment to transparent communication, pledging to inform investors via market announcements within one market day of any deviation from the proposed remedial actions.
The company also highlighted the critical implications under CSE Rule 7.5(d)(ii)(A)(5)(d). As per this rule, if the matters giving rise to the EMGC are not resolved within fifteen (15) months from the date of transfer to the Watch List (December 7, 2023), trading of the company’s securities shall be suspended. Given that the EMGC has persisted through the financial year ended March 31, 2026, this 15-month period has now elapsed. Furthermore, a trading suspension exceeding twelve (12) months would lead to the delisting of the company’s securities.
MHDL remains focused on the successful implementation of its strategic initiatives, which are designed to resolve the auditor’s going concern emphasis and secure the company’s long-term operational and financial viability. The market awaits further updates on the progress of these significant developments.
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