SINGAPORE – Struggling start-up Honestbee has been given a four-month reprieve from its creditors, a move that will give a boost to the company’s efforts to restructure its business.
The High Court granted an extension of its moratorium to Jan 31 next year (2020) at a closed hearing on Monday (Sept 30).
Later in the evening, Honestbee said it will provide stakeholders shortly with details of a suitable scheme of arrangement.
The company had applied for a six-month debt moratorium on Aug 1, and on Aug 27, was given an extension of its automatic moratorium.
Honestbee also said on Monday evening that it will focus on its grocery business in Singapore, and has plans to restore its regional businesses through partnerships and joint ventures.
The Straits Times understands that Honestbee intends to propose a scheme to transfer its business and assets to a new Singapore-incorporated company, which would be wholly owned by a company in the United States.
An Asian retailer with physical stores worldwide has expressed interest in investing in Honestbee through the US company.
Potential investors are also interested in partnering Honestbee to operate in Japan, Thailand, Malaysia and the Philippines if the firm successfully completes its restructuring in Singapore, ST understands.
Chief executive Ong Lay Ann, who took over the reins of the embattled company on July 15, said in the company’s Monday statement that a successful restructuring will set the business on a strong path to recovery.
“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,” Mr Ong added.
ST understands that Honestbee’s monthly expenses are around $1,175,000, most of which are for rent, utilities, worker salaries and operating expenses.
It is also in the process of paying its former employees in five instalments the salaries owed to them, said a company spokesman. About 215 workers are reportedly owed almost $1 million.
An ex-employee told ST the first instalment was received on Monday, in line with the payment schedule that had been agreed on.