Media reports have stated that Hela Apparel Holdings PLC, one of Sri Lanka’s leading apparel export companies, has filed a petition seeking an order from the Western Province Commercial High Court to wind up the company.The company has informed the Colombo Stock Exchange (CSE) that it has become unable to meet its debt obligations due to prolonged liquidity difficulties, and that all available options, including debt restructuring, finding new investors and selling assets, had been explored but proved unsuccessful.Accordingly, on 5 August 2026, separate winding-up petitions were filed before the Commercial High Court in respect of Hela Apparel Holdings PLC and its two main subsidiaries, Hela Clothing (Pvt) Ltd and Foundation Garments (Pvt) Ltd.

Impact on overseas investments, including Kenya

Hela Apparel Holdings PLC is an international apparel group that had expanded its manufacturing network beyond Sri Lanka to Kenya, Egypt and Ethiopia.

Its investment in Kenya, in particular, was aimed at gaining competitive access to the US market by taking advantage of duty concessions available under the African Growth and Opportunity Act (AGOA).

However, since last year, the company has been implementing a business restructuring program which has included the sale of its UK business operations, the transfer of certain factories in Sri Lanka to Emerald Clothing, and the restructuring of its African operations.

Who owns the company?

According to the latest published data from the Colombo Stock Exchange, the major shareholders of Hela Apparel Holdings PLC are:

• Lessing Hela Ltd – 46.89%
  Tars Investments Lanka (Pvt) Ltd – 17.99%
  P. L. D. Jinadasa – 10.48%
• A. R. Raziya served as Chairman of the company, while P. L. D. Jinadasa served as Chief Executive Officer.

How many jobs are at risk?

The news of Hela Apparel’s winding-up has raised serious concerns about the future of its employees.

However, according to a statement issued by the Board of Investment of Sri Lanka (BOI), 3,674 employees of Hela Clothing (Pvt) Ltd and Foundation Garments (Pvt) Ltd have already been transferred to Emerald Clothing. Their length of service, salaries and other employment rights will continue without interruption.

Accordingly, the BOI says these employees will not immediately lose their jobs.

At one point, the Hela Apparel Group employed more than 17,000 people globally, although recent reports indicate that this figure has fallen to around 12,400.No official clarification has so far been issued regarding the future of employees in its other overseas operations.

Key reasons for collapse

Economic analysts point to several factors behind Hela Apparel’s collapse, including its heavy debt burden, prolonged liquidity difficulties, a decline in global apparel orders, high interest costs, unsuccessful attempts at debt restructuring, the inability to secure new investors and rising costs associated with its international operations.

A major warning for Sri Lanka’s apparel industry

Hela Apparel has been regarded as one of Sri Lanka’s leading apparel exporters for decades.

Industry analysts view the company’s entry into court proceedings for its winding-up as a strong indication of the seriousness of the financial and market challenges facing Sri Lanka’s apparel industry.

They point out that the situation could have both direct and indirect effects on banks, creditors, textile suppliers, exporters and foreign investment projects.

Foreign exchange earnings

Hela Apparel Holdings PLC was a major apparel exporter that generated between US$70 million and US$90 million in foreign exchange earnings for Sri Lanka annually.

In its most recent full financial year, 2024/25, the company recorded export revenue of US$76.7 million, equivalent to more than Rs. 27 billion.

Accordingly, Hela Apparel’s contribution can be estimated at approximately 1.5% of Sri Lanka’s total apparel exports.