Sri Lanka Hela Clothing seeks Rs 4 billion through IPO to grow and settle debts

ECONOMYNEXT – HELA Clothing, a clothing manufacturer with factories across Africa and design facilities in Europe, is seeking to raise Rs 4 billion in an initial public offering to fund cross-border expansion, the scanning and settlement of short-term debts.

The company is offering 267.108 million shares at 15 rupees.

HELA Clothing’s profit increased 13.7% year-on-year to Rs 872 million in the fiscal year ended March 31, 2021.

The company reported sales of Rs 32.1 billion through March 2021, stable from the previous year, however, the company’s gross profits fell 13.3% to 6 billion rupees.

“The funds raised will be used for an investment in a fabric factory and will help finance a new corporate resource planning system, with the remainder being invested in HELA subsidiaries,” says its introductory prospectus in stock Exchange.

“The funds injected into the subsidiaries will be used to repay part of the short-term debt and to invest in capital expenditures improving the productivity of the manufacturing operations of the company. “

Of the 4 billion rupees expected to be raised, the company intends to invest 999 million rupees in a fabric factory, 596 million rupees in the implementation of a new resource planning system for company (ERP), 2.4 billion rupees in group subsidiaries, 1.9 billion rupees to settle short-term debt and 410 million rupees to increase the productivity of the company.

The fabric manufacturing plant will have a daily production capacity of 15-30 tons. HELA is looking to acquire an already operational fabric factory or invest in a new fabric factory.

(Colombo / Dec31 / 2021)

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