Singapore-based grocery and food delivery startup Honestbee has made an application to the city-state’s High Court to commence a court-supervised restructuring process, it said in a statement on Friday.
The move intends to propose a scheme of arrangement to the court to restructure its liabilities and to seek a moratorium against enforcement actions and legal proceedings, adding that it is “necessary to ensure that Honestbee has the right structure in place for long-term stability and success”.
“Honestbee has taken this imperative step to protect and preserve the value of its businesses while it restructures its operations across Asia. The court-supervised restructuring process is in the best interest of Honestbee’s stakeholders as the company can focus on re-evaluating the business without interference; streamline operations, increase existing efficiencies and bring down the cost structure,” said the startup.
Honestbee has engaged Oon & Bazul LLP as its legal advisor and DHC Capital Pte Ltd as its independent financial advisor.
The court-supervised restructuring comes shortly after the startup roped in Ong Lay Ann as its new CEO while the last of Honestbee’s co-founder and CTO Jonathan Low resigned last month.
According to a report by The Business Times, the court-supervised process would give Honestbee a six-month reprieve from its creditors which include existing investors Formation Group as well as its former interim CEO and current chairman Brian Koo. The startup is said to owe its creditors over $180 million.
As part of the restructuring, Honestbee will convert all secured and unsecured debt to equity. In addition, Ong said the startup has also laid off 38 employees in Singapore this week.
Honestbee has suspended almost all of its overseas operations – the most recent one in Malaysia. In the past months, it has also halt its services in Hong Kong, Indonesia, Japan, the Philippines and Taiwan.
In Taiwan, Honestbee is said to owe nearly 300 restaurants NT$7.79 million ($250,561) in overdue payments. Its physical store, Habitat by Honestbee and its grocery delivery service in Singapore remain operational so far.
We had earlier reported that Honestbee is looking to raise some S$20 million ($14.5 million) in bridge financing, and is open to raising this capital via convertible loans/warrants at double-digit interest rates for a term of 6-12 months.
The bridge loan will also be personally backed by Koo, who is also the general partner and founder of Silicon Valley-based investment firm Formation 8, which led a $15-million Series A round for Honestbee in 2015.