High Court dismisses honestbee's restructuring bid; creditors may wind up firm

Sharanya Pillai

Published Thu, Mar 26, 2020 · 10:12 AM

THE High Court has dismissed honestbee's application to convene a scheme meeting in its effort to restructure some US$230 million of debt, effectively enabling creditors to now apply to wind up the company, The Business Times has learned.

In a hearing on Thursday morning, honestbee had sought a two-week adjournment, but this was dismissed by the court, BT understands. As BT had reported on Wednesday evening, honestbee sought the adjournment due to its key white knight Brian Koo and his affiliated entities potentially withdrawing their support for the restructuring.

As a result of the court outcome, honestbee is now no longer under court protection from its creditors. Its sole secured creditor is Formation Group, Mr Koo's venture firm, with all-monies charges for US$4 million. The distressed startup also has more than 1,000 other unsecured trade and financial creditors.

In addition, LHN Space Resources is now able to retake level 1 of 34 Boon Leat Terrace, which had housed honestbee's concept supermarket habitat, BT understands.

The court outcome could mark the end of the road for honestbee, which had still been looking for other potential investors on Wednesday evening. In an e-mail to creditors on Wednesday, the startup said that FLK and Formation are now re-considering their continued support for the company due to "the worsening Covid-19 pandemic across the world and the resulting uncertainties".

Under honestbee's proposed scheme of arrangement, FLK was to have injected US$7 million into the company to repay creditors owed above S$500 each, with three cents on the dollar in cash. honestbee was to have repaid the remainder of its debt via issuing creditors equity.