High Court dismisses Honestbee's restructuring bid

The High Court has dismissed start-up Honestbee's application to convene a scheme meeting in its effort to restructure some US$230 million (S$330 million) of debt.

This effectively enables creditors to now apply to wind up the company.

Honestbee had sought a two-week adjournment at the hearing yesterday, but it is understood that this was dismissed by the court.

The firm sought the adjournment due to its key white knight, Mr 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 start-up also has more than 1,000 other unsecured trade and financial creditors.

In addition, LHN Space Resources is now able to retake level one of 34 Boon Leat Terrace, which had housed Honestbee's concept supermarket Habitat, The Business Times 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.

It told creditors by e-mail on Wednesday that FLK Holdings and Formation were now re-considering their continued support for the company due to "the worsening Covid-19 pandemic across the world and the resulting uncertainties".

Honestbee's proposed scheme of arrangement involved FLK injecting US$7 million into the company to repay creditors owed above $500 each, with three cents on the dollar in cash.

Honestbee was to have repaid the remainder of its debt via issuing creditors equity.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on March 27, 2020, with the headline 'High Court dismisses Honestbee's restructuring bid'. Print Edition | Subscribe