Hela Apparel Holdings PLC has resolved to seek a Court-ordered winding up after its Board concluded that the company and two subsidiaries are unable to pay their debts because of continuing liquidity constraints and are no longer able to continue their businesses.
In a disclosure to the Colombo Stock Exchange (CSE), the company said its Board, after reviewing the financial position of the company and its subsidiaries, including realisable assets, liabilities, liquidity levels, indebtedness, operating performance, expected cash flows, and creditor obligations, concluded that Hela Apparel Holdings PLC, Hela Clothing Ltd., and Foundation Garments Ltd., were unable to meet their debt obligations.
The Board, by a resolution passed on 4 August, decided that Hela Apparel Holdings be wound up by Court in accordance with the Companies Act, No. 7 of 2007. An application for winding up was filed in the Commercial High Court of the Western Province (Exercising Civil Jurisdiction) in Colombo on 5 August.
Hela Clothing Ltd., and Foundation Garments Ltd., have also filed separate winding-up applications in the same Court following decisions by their respective Boards.
The company said the Board had made due and continuing inquiry into the affairs of the company and the relevant group entities, regularly reviewed their financial and operational position, and obtained professional and independent advice where appropriate.
It said the Board had pursued, tested, and reassessed reasonably available restructuring and value-preservation alternatives, including debt restructures and strategic investments, to preserve value and mitigate losses to creditors, employees, and other stakeholders.
According to the company, the decision to seek a Court-ordered winding up was taken only after those alternatives had been exhausted, rejected, deemed incapable of timely implementation, or were no longer commercially viable.