Struggling grocery retailer and delivery startup Honestbee has been granted a four-month debt moratorium by the Singapore High Court.
While two months shorter than the protection period the company sought from the court, it allows the business to restructure free from creditor pressure.
Reports by Singapore business media show Honestbee owed around US$236 million in current liabilities as at the end of June. On top of that it has debt of around $210 million owed to some 1800 convertible noteholders which it is trying to exchange for equity.
While Honestbee’s debt is a major impediment to the ongoing business, as much as 80 percent of the liability is to investor Brian Koo and entities controlled by himself or family interests.
Koo stepped down as chairman of Honestbee in mid-September but is believed to support the debt restructuring scheme.
Following the court decision, Honestbee CEO Lay Ann Ong issued a statement about the company’s immediate future: “A successful recapitalization and restructuring of the business will set a strong path of recovery for the company. This is necessary to ensure that we have the right structure in place moving forward so that we can better serve our customers across Asia.”
The company will release further details shortly on its recapitalization progress and plans to sell of some parts of the business.