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BT EXCLUSIVE: STARTUPS

honestbee clears out furniture from habitat; police called in

BT EXCLUSIVE: STARTUPS

honestbee clears out furniture from habitat; police called in

Failed startup believed to have contacted police after landlord's staff appeared at premises to question the move
3 -min read
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Failed startup believed to have contacted police after landlord's staff appeared at premises to question the move
3 -min read
Listen to this article

Singapore

TENSIONS between honestbee and landlord LHN Space Resources have escalated with police called in on Feb 28 after the embattled startup moved its furniture and fixtures out of its concept supermarket habitat.

When BT visited habitat at 34 Boon Leat Terrace on the afternoon of Feb 28, police officers were seen interviewing staff of LHN. BT understands that honestbee contacted the police after LHN staff appeared at the premises to question why the startup was moving its furniture out.

When BT visited habitat again on Saturday evening, more furniture, including about 150 chairs and dining tables, were lined up at the entrance of habitat, with a few honestbee vans parked at the loading area.

A lorry stacked with the tables and chairs from habitat was seen driving away. Though it's unclear where the furniture was being taken to, BT understands that honestbee has rented a new space in Genting Lane from March 1.

It is understood honestbee has S$1.97 million worth of furniture and fixtures, S$3.87 million worth of store equipment and over S$84,000 in office equipment recorded on its books as of end-January.

Both honestbee and LHN declined to comment on the matter. BT understands that honestbee still has seven months left on its three-year lease for habitat, and that at least as of end-January, LHN was not deemed to be a creditor of the startup. It is not clear if honestbee currently owes LHN any rental payment.

The latest developments come as honestbee is said to mull the permanent closure of habitat, due to heavy overhead costs. The supermarket has been shut since Feb 10, on account of reduced footfall after the Covid-19 outbreak. The startup is now said to be considering a pivot to a quick service restaurant concept instead.

The potential change in business direction could be challenging to execute, given that honestbee appears to be on a tight leash in terms of working capital. The startup still owes ex-employees the final tranche of salary repayments. It recorded liabilities of about S$707,000 in payables for salaries and unpaid Central Provident Fund contributions, as at end-January.

In addition, BT has learned that one of honestbee's key executives, Kenneth Forbes, resigned about a week ago as vice-president of habitat. Mr Forbes was previously general manager of habitat and oversaw its early development. When contacted, he confirmed his resignation but declined to comment further.

Should habitat remain closed, it would be a stark reversal from honestbee's earlier plans, when it cited the continuation of habitat as the centrepiece of its restructuring.

The embattled startup is currently seeking a nine-month extension of its debt moratorium and is proposing to restructure some US$230 million worth of debt, by repaying creditors 3 cents on the dollar in cash and the remainder via issuing shares in a new entity. However, creditors owed S$500 or less will be repaid in full.

LHN has opposed honestbee's moratorium application and also requested to be carved out of the moratorium.

LHN's application against honestbee was heard before the High Court on Feb 27 and the hearing has been adjourned.

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