Hela Apparel Holdings PLC has filed an application before the Commercial High Court seeking a court-ordered winding up of the company after its Board concluded that it was unable to pay its debts due to continuing liquidity constraints.

In a filing to the Colombo Stock Exchange, the company stated that its Board reviewed the financial position of the group, including its realisable assets, liabilities, liquidity levels, indebtedness, expected cash flows and creditor obligations, before determining that Hela Apparel Holdings PLC and its subsidiaries, Hela Clothing (Private) Limited and Foundation Garments (Private) Limited, were unable to continue their businesses.

The Board resolved on August 4 to seek a court-ordered winding up under the Companies Act No. 7 of 2007, with applications submitted to the Commercial High Court on August 5. The two subsidiaries filed separate winding-up applications.

Directors explored restructuring options, debt restructures and strategic investments in an effort to preserve value and minimise losses to creditors, employees and other stakeholders. The decision to wind up was taken only after those alternatives were exhausted, rejected or no longer commercially viable.