Singaporean online grocery and food delivery startup Honestbee has filed an application to the city-state’s high court to commence a court-supervised restructuring process, according to The Straits Times.
This move came shortly after the food delivery company appointed a new chief executive officer, Ong Lay Ann, whose top priorities are to restructure the company’s capital and resolve its debt.
The restructuring process will give Honestbee—who is in debt to the tune of USD 180 million—a six months reprieve from its creditors. These creditors include the Formation Group as well as the associates of Brian Koo, who is Formation Group’s founding partner and Honestbee chairman.
At the same time, the appeal to the high court will prevent creditors from interfering in its planned overhaul.
The process will include a streamlining of operations, increasing efficiencies and lowering of cost structures—affirming the previous speculation that Honestbee’s struggle lies in its unsustainable and cash-burning business model.
Honestbee has already commenced the restructuring process with the lay-off of 38 employees who were mainly in operations and engineering roles. The company will also convert all secured and unsecured debt to equity as part of the restructuring.
It has also engaged Oon & Bazul LLP as legal adviser and DHC Capital Pte Ltd as its independent financial adviser.
Over the past few months, the firm has suspended most of its operations across Asia, with the latest being Malaysia following several strategic reviews. Honestbee also reportedly hasn’t cleared its debts with its food partners in Malaysia.
The service provider announced an exit from Singapore’s food delivery market and a temporary suspension of its on-demand laundry services in the city-state in May this year.