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Friday January 21st, 2022
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Sri Lanka Hela Clothing seeks Rs.4 bln via IPO to expand, settle debts

ECONOMYNEXT – HELA Clothing, an apparel manufacturer that has factories across Africa and design facilities in Europe is seeking to raise 4 billion rupees in an initial public offer to fund cross-border expansion, digitalization and settle short-term debts.

The firm is offering 267.108 million shares at 15.00 rupees.

HELA Clothing’s profit gained 13.7 percent year-on-year to 872 million rupees in the financial year ended on March 31, 2021.

The firm reported a revenue of 32.1 billion rupees in the year to March 2021, steady from a year earlier, however, the firm’s gross profits slipped 13.3 percent to 6 billion rupees.

“The funds raised will be used for an investment in a fabric mill and contribute to the funding of a new Enterprise Resource Planning system, with the remainder invested in the subsidiaries of HELA,” its IPO prospectus said.

“The funds injected into subsidiaries will be utilized to retire a portion of short-term debt and to invest in productivity-enhancing capital expenditure for the Company’s manufacturing operations.”

Out of the 4 billion rupees expected to be raised, the firm intends to invest 999 million rupees in a fabric mill, 596 million rupees in implementing a new Enterprise Resource Planning (ERP) System, 2.4 billion rupees into the subsidiaries of the group, 1.9 billion rupees to settle short term debt and 410 million rupees to increase the productivity of the company.

The fabric manufacturing mill will have a daily production capacity of between 15 to 30 tonnes. HELA is looking to acquire an already operational fabric mill or invest in a new fabric mill.

(Colombo/Dec31/2021)

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