High Court gives honestbee 30 days to refine moratorium bid

Singapore

THE Singapore High Court has given honestbee an extra month to beef up its application for a six-month debt moratorium against its creditors, chief executive Ong Lay Ann said on Tuesday.

The embattled startup is looking to restructure some S$280 million worth of debt, owed to nearly 1,800 creditors, The Business Times understands.

honestbee will enjoy court protection from those creditors for the next month. But the pressure is on for the startup, with several creditors already opposing its application for a moratorium.

In a closed-door hearing on Tuesday, the Singapore High Court granted honestbee a 30-day extension of its debt moratorium up till Oct 4, Mr Ong told reporters in a conference call.

honestbee's application, filed on Aug 1, has already staved off creditors for one month so far.

Mr Ong could not immediately specify what further details the Court requested, but added: "I think they were looking at perhaps some kind of financial projections... and an initial idea of what the proposal for the scheme is going to look like."

In a statement later released on Tuesday evening, honestbee confirmed that the court directed the startup to furnish more details of its proposed scheme of arrangement. honestbee previously told BT that it plans to convert all of its debt to equity to clean its books.

The debt stay extension comes asseveral honestbee creditors, including landlord LHN Space Resources, trade creditor MOS Foods Singapore and financial creditor Benjamin Lim Jia-Rong have filed affidavits opposing honestbee's debt moratorium application, BT understands.

LHN Space Resources and MOS are understood to have issued letters of demand to honestbee for over S$228,000 and over S$63,700 respectively, while Mr Lim is owed US$3.8 million.

BT had previously reported that Mr Lim is separately suing honestbee's former chief executive Joel Sng for repayment of this sum. According to regulatory filings, Mr Lim is a director of Swee Chioh Fishery and The Market @ Central.

On the issue of dissenting creditors, Mr Ong said: "I was quite surprised that the creditors were opposing a scheme that would give them the best possible outcome... the flipside of this is if they don't agree, then the company falls into liquidation."

LHN is also understood to be seeking a carve-out that would allow the landlord to re-enter property that is currently leased to honestbee for habitat, honestbee's supermarket at Boon Leat Terrace.It is not clear if the landlord's dissent could impact honestbee's plans to bank on habitat for its future business strategy.

However, Mr Ong expressed confidence that honestbee will continue to operate habitat as a core vertical. To stay afloat in the interim, honestbee has also secured an additional US$1 million in funding via a promissory note from Formation Group, he said.

In all, honestbee is understood to owe its 20 largest unsecured creditors some S$276.6 million, higher than previously announced estimates. It also owes its key backer, Formation Group, US$4 million secured by a floating charge over all assets.

BT also understands that honestbee is facing demands for about S$9.7 million worth in claims and 12 court proceedings.

Creditors believed to be linked to honestbee chairman Brian Koo - Mr Koo himself, Formation Group, private vehicle A Honestbee and F8 Asia Growth SPV - are understood to have indicated support for the moratorium. Eight creditors whose claims represent about 1.9 per cent of honestbee's total debt, including Mitsubishi Corp and Hong Wun Pte Ltd, are also said to have indicated support. BT understands that honestbee is claiming that the supporting creditors as a whole currently represent just under 88 per cent of honestbee's total unsecured debt.

honestbee's next court hearing is scheduled for Sept 30, Mr Ong said.