Hela Apparel sells two subsidiaries to Q Collection for Rs.2.7bn

Hela Apparel Holdings PLC said this week it divested two of its sub-subsidiaries for Rs.2.7 billion to Singapore-based Q Collection Pte Ltd, in a bid to simplify its structure and improve performance under a wider group restructuring.

The transaction includes the full sale of Jinadasa Bennett (Pvt.) Ltd and Foundation Bennette (Pvt.) Ltd—subsidiaries of Foundation Garments (Pvt.) Ltd, which is in turn owned by Hela Clothing (Pvt.) Ltd, a wholly-owned unit of Hela Apparel. The deal covers manufacturing plants in Narammala and Mawathagama and a jointly held warehouse in Uhumeeya.

“This forms part of a broader turnaround strategy focused on structural simplification and performance improvement, with the objective of positioning its operations for recovery in the coming financial year and enhancing long-term competitiveness,” the company said in a disclosure to the Colombo Stock Exchange.

The sale received approval from Sri Lanka’s Board of Investment on May 14 and complies with relevant local laws, including the Companies Act and Land (Restrictions on Alienation) Act. Hela noted that the transaction does not qualify as a “major transaction”, under the Companies Act.

The employees at the Narammala and Mawathagama plants were offered continued employment with Jinadasa Bennett, under the existing terms, with no loss of accumulated benefits. Hela said the transfer was conducted in line with applicable labour regulations.

Q Collection, headquartered in Singapore, is a private apparel manufacturer, with growing operations across South Asia. According to Hela, the divestment is part of a broader strategic partnership between the two companies. Under this arrangement, Q Collection will carry out production at the facilities while Hela continues to market their capacity to its global customer base.

“This will ensure uninterrupted service for Hela’s customers and no material impact on the group’s revenue generation capacity,” the company said.

The group said the proceeds from the transaction would be used by its subsidiaries to settle short-term liabilities and improve its balance sheet. The restructuring, it added, is aligned with Hela’s long-term objectives of financial sustainability and supply chain agility.

Following the completion of the deal, Jinadasa Bennett and Foundation Bennette will no longer be part of the Hela group. However, Hela will continue to operate four manufacturing facilities in Sri Lanka, including its leased plant in Palapathwala.

The company said further announcements on the group’s restructuring initiatives would be made as material developments arise.