Hela Apparel Mauritius subsidiary sale is being considered as part of a broader financial restructuring strategy, as the Sri Lankan apparel group seeks to reduce debt and stabilise its balance sheet. The proposed transaction involves a partial divestment valued at 12 million dollars.
Hela Apparel Mauritius subsidiary sale aims to strengthen liquidity
Sri Lanka’s Hela Apparel Holdings has announced plans to divest up to 65 percent of its shares in Hela Brands Ltd (Mauritius), a move that forms part of an ongoing effort to restructure debt and improve group-wide liquidity. The proposed transaction, based on a non-binding offer from a potential investor, values the stake at approximately 12 million dollars, according to disclosures made by the company.
Hela Apparel stated that the proceeds from the proposed sale would be directed toward settling outstanding obligations of certain subsidiaries. The move reflects mounting pressure on corporate balance sheets amid tighter financing conditions and underscores the group’s intention to streamline operations while meeting creditor commitments.
Hela Brands Ltd (Mauritius) functions as a key holding entity within the group, controlling Hela Brands Ltd (UK), which manages the group’s brand licensing operations. These licensing activities represent a strategic component of Hela Apparel’s value chain, supporting brand development and market access beyond its manufacturing footprint. The group acquired Hela Brands Ltd (UK) through the Mauritius-based holding company in January 2024 for 10 million dollars, making the proposed divestment a significant strategic decision within a relatively short timeframe.
The Hela Apparel Mauritius subsidiary sale is occurring alongside broader negotiations with banks and other creditors aimed at restructuring the group’s debt. The company confirmed that discussions are ongoing with financial institutions to realign repayment schedules and ease liquidity pressures. Such measures are increasingly common among regional manufacturers facing elevated borrowing costs, currency volatility, and shifting global demand patterns.
In addition to the proposed divestment, Hela Apparel revealed that it is engaged in talks with a strategic investor regarding potential funding options. This prospective investment is intended to help settle remaining liabilities and enhance cash flow across the entire group. While details of the discussions have not been disclosed, management indicated that any funding arrangement would be aligned with the company’s long-term operational and financial objectives.
According to the company, the consolidated net assets of Hela Brands Ltd (Mauritius) and its subsidiaries amount to approximately 26.5 million dollars. This valuation provides context for the proposed sale price and suggests that the transaction would represent a partial monetisation rather than a full exit from the brand licensing segment. Retaining a minority stake would allow Hela Apparel to maintain strategic exposure while alleviating immediate financial strain.
Shareholder approval will be sought for the transaction at an extraordinary general meeting scheduled for February 3. The outcome of the meeting is expected to be closely watched by investors, given the implications for the group’s capital structure and future earnings profile. Approval would pave the way for the completion of the sale and the implementation of related restructuring measures.
Beyond the divestment, Hela Apparel plans to carry out a series of internal restructuring initiatives during February and March 2026, subject to lender approval. These initiatives include the transfer of shareholdings in several group companies from one entity to another, a process aimed at simplifying the corporate structure and improving operational efficiency. Such internal realignments are often used to enhance transparency, reduce administrative costs, and facilitate more effective capital allocation.
The proposed steps signal a concerted effort by Hela Apparel to address financial challenges proactively rather than relying solely on short-term remedies. Analysts note that the combination of asset sales, creditor negotiations, and potential strategic investment suggests a comprehensive approach to stabilisation, particularly at a time when global apparel markets remain competitive and cost-sensitive.
While the Hela Apparel Mauritius subsidiary sale is still subject to approvals and final negotiations, it represents a notable development in the group’s restructuring journey. The transaction, if completed, could provide immediate liquidity relief while allowing the company to retain a foothold in its brand licensing operations. As the restructuring progresses, stakeholders will be looking for clearer indications of how these measures translate into sustained financial resilience and long-term growth.