Hela Apparel winding up proceedings begin after the listed apparel manufacturer said severe liquidity pressures left it unable to repay debts.
Hela Apparel winding up proceedings have begun after the listed Sri Lankan apparel manufacturer said severe liquidity constraints left it unable to repay its debts.
Hela Apparel Holdings PLC informed the Colombo Stock Exchange that its board had decided to seek a court-ordered winding up of the company and two major subsidiaries.
The affected companies are Hela Clothing (Private) Limited and Foundation Garments (Private) Limited.
The board reached the decision after reviewing the group’s financial position, realisable assets, liabilities, liquidity, indebtedness, expected cash flows and creditor obligations.
It concluded that the three companies could no longer continue their businesses while meeting their financial obligations.
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Hela Apparel Winding Up Filed in Commercial High Court
The board resolved on August 4 to pursue winding-up proceedings under the Companies Act No. 7 of 2007.
Applications were then filed before the Commercial High Court on August 5, 2026. The two subsidiaries also submitted separate winding-up applications.
The company said it had previously explored alternative options to stabilise the business.
These included debt restructuring and attempts to attract strategic investment. However, the board concluded that those measures had either failed or were no longer commercially viable.
According to the company, pursuing court-supervised winding up was intended to minimise further harm to creditors, employees and other stakeholders.
The move follows a prolonged restructuring period.
In June 2025, Hela announced the divestment of two Sri Lankan manufacturing operations at Narammala and Mawathagama as part of a broader turnaround programme.
Hela’s shares had also been suspended from trading before the latest winding-up announcement, making it inaccurate to suggest that Thursday’s announcement itself caused a broad Colombo market sell-off.
In fact, the Colombo Stock Exchange’s All Share Price Index closed August 6 up 0.49%, while the S&P SL20 also gained 0.48%.
Global Apparel Network Served Major Fashion Brands
Hela built an international reputation as a Sri Lankan-origin apparel manufacturing group with operations extending into Africa.
Over the years, the company has manufactured garments for major international brands including Calvin Klein, Tommy Hilfiger and Michael Kors. Earlier company profiles also listed Tesco and several other global retailers among its customers.
Its product portfolio has included intimate apparel, activewear, sportswear and other clothing categories.
Hela also expanded beyond Sri Lanka into Kenya, Ethiopia and Egypt during its international growth phase.
However, the group’s operating footprint has changed significantly during its restructuring.
Its 2024/25 annual report recorded approximately 12,400 employees across the relevant continuing operations, with staff concentrated in Egypt, Kenya and Sri Lanka.
The Hela Apparel winding up process now marks one of the most serious developments in the company’s history.
The court proceedings will determine the next stage for the listed parent company and its affected subsidiaries, while creditors, employees and shareholders await clarity on how the remaining assets and liabilities will be handled.
