Hela Apparel Holdings PLC has petitioned the Commercial High Court for an order winding up the company, after its board concluded it can no longer meet its debt obligations.
The company disclosed the filing to the Colombo Stock Exchange on Thursday. Two subsidiaries — Hela Clothing (Private) Limited and Foundation Garments (Private) Limited — have filed separate winding-up petitions of their own.
The board resolved on August 4 to seek liquidation by court order under the Companies Act No. 7 of 2007, and the petitions were filed before the Commercial High Court on August 5, Hiru News reported.
Directors say alternatives were exhausted
Before concluding that the three companies could not continue trading, the board carried out a wide review of the group’s financial position — realisable assets, liabilities, liquidity, indebtedness, projected cash flows and obligations to creditors, the company said.
Directors examined restructuring options, debt restructuring and strategic investment in what the company described as a maximum effort to preserve value and limit the damage to creditors, employees and other stakeholders.
The decision to wind up was taken only after each of those options had failed, been rejected, or been confirmed as no longer commercially viable, Hela Apparel said.
Losses had overwhelmed the balance sheet
EconomyNext, which reported the filing as marking the end of one of the country’s major apparel exporters, put the group’s accumulated losses at Rs. 31.6 billion and its total equity at a negative Rs. 18.8 billion.
Revenue for the nine months to December 2025 fell by close to 29%, from Rs. 61,546 million to Rs. 43,953 million, according to the same report.
From audit disclaimer to insolvency
The filing completes a decline that has been visible in the company’s disclosures for more than a year. In June, the CSE warned that trading in Hela Apparel shares would be suspended unless the company resolved a disclaimer of opinion issued by its external auditor — a disclaimer that stemmed from its inability to complete a debt restructuring that had been pending across several reporting periods.
Earlier in the year, Emerald Clothing acquired several Hela factory units as the group tried to consolidate operations and conserve cash. The sector has been squeezed by softening US demand and competition from Bangladeshi and Vietnamese suppliers.
Sources: Hiru News, EconomyNext.
