Singapore car-sharing service Shariot, related firms face S$180 million debt; exploring survival options

[SINGAPORE] A group of nine related companies, including car-sharing service Shariot and rental company Autobahn Rent A Car, is exploring restructuring options.

The Business Times understands that the group’s debts are in the region of S$180 million, and that creditors have been asked to hold off on enforcement and recovery actions until concrete next steps are decided.

A letter seen by BT dated Tuesday (Nov 25), from law firm Fervent Chambers to the companies’ creditors, said that Fervent has been appointed by the companies to advise on “potential restructuring options”.

This includes a scheme of arrangement under Singapore’s Insolvency, Restructuring and Dissolution Act, the possibility of court moratoriums and “other restructuring pathways as may be appropriate in the circumstances”.

The nine entities listed in the group include eight private limited companies – Autobahn Rent A Car, Ah Tan Car Repairs, Bayfront Autohub, Hamilton Capital, Hamilton Autohub, Hamilton Autobahn, Shariot and Shinsei Rent A Car – and one partnership, RS Carz.

The letter described them as a related group of entities with interlinked financial, operational and fleet-related obligations.

Clarence Lun, lead counsel for Fervent, said: “We are presently reviewing and advising our client options to restructure debts and will not be able to comment further.”

Shariot and Autobahn Rent A Car did not immediately respond to queries from BT on the proceedings.

Call for creditors to hold off

The letter from Fervent also stated that the firm is gathering “full instructions and financial data” from the companies, and requested a temporary standstill to preserve stability while the companies consider restructuring options.

The letter requested that creditors refrain from taking enforcement or recovery actions, such as commencing legal proceedings, repossessing vehicles or assets, or issuing statutory demands, among others.

The companies intend to “engage creditors in good faith”, the letter continued, with the goal being a restructuring proposal that preserves value for the group as a whole, and maximises recoveries for creditors and ensures fair and proportionate treatment of creditors across the group.

Fervent’s next steps are to make a preliminary restructuring outline, coordinate meetings with creditors and update them on any potential court filings or official proceedings, including any scheme of arrangement.

Shariot debuted in 2020 offering short-term vehicle rentals that start and end at the same location. At launch, its fleet consisted of 250 vehicles at 85 locations and advertised rental rates as low as S$1 an hour.

Currently, its website shows rentals starting at S$6.90 with various types of vehicles at 300 locations, though it does not state the size of its current fleet.

Handshakes data shows that the companies were incorporated from 2012 to 2020, with Shariot being the most recent; all operate in the automotive sector.

The companies, except the partnership RS Carz, list Tan Boon Kee, also known as Roy Tan, as director and majority shareholder of all companies, and Sanjay Kumar Raj as director and minority shareholder. RS Carz lists the two Singaporeans as the sole owners of the business.

Tan, the founder and managing director of Shariot and a former sales representative for BMW and Honda, did not respond to queries from BT.

Shariot, Autobahn Rent A Car and Shinsei Rent A Car are vehicle rental companies. Bayfront Autohub, Hamilton Autohub, Hamilton Autobahn and RS Carz are involved in vehicle retail; Ah Tan Car Repairs is a vehicle workshop, and Hamilton Capital is a provider of motor credit.

In August, car-sharing service BlueSG laid off staff and announced a pause in operations as it seeks to revamp its business.