EMBATTLED startup honestbee is considering a permanent shutdown of its concept supermarket habitat at Boon Leat Terrace, due to significant overhead costs and uncertainty over its tenancy, The Business Times (BT) understands from sources.
However, the company now plans to relaunch its business in the form of Quick Service Restaurants that tap habitat's 16 food and beverage concepts, BT understands. These developments were first reported by Tech in Asia on Friday.
BT understands that honestbee is mulling the move due to insufficient working capital, as well as the continued opposition of LHN Space Resources, the landlord of habitat, towards the startup's proposed scheme of arrangement. LHN is further understood to have declined to negotiate an extension of honestbee's lease at Boon Leat Terrace.
In response to queries from BT about whether habitat will shut permanently, a spokesman did not respond directly but said: "Upon closer review of the operating costs involved, it would not make business sense to sustain premises of this scale. We are exploring other ways where we can both maintain the brand and the technology in an effective manner."
Under the scheme, honestbee plans to repay some US$230 million of debt via a debt-to-equity swap, which will see about 800 creditors owed over S$500 repaid 3 per cent in cash, and the rest in equity of a new Singapore entity. The remaining 1,000-odd creditors owed S$500 or less will be repaid in full.
To date, some 51 creditors are understood to have expressed support for honestbee's scheme.
Previously, retaining tenancy of habitat had been a pre-condition to honestbee's proposed scheme. With the latest development, honestbee may need to amend the terms of its proposed scheme, BT understands.
Earlier on Friday, honestbee had announced that habitat will remain closed up till end-February, instead of Feb 23 as previously announced.