Sinking in debts of around US$180 million, Singapore grocery retailer Honestbee is seeking court protection from creditors to allow it to restructure.
The company has applied to the High Court to commence a process which reportedly would give it six months protection from creditors lodging winding up procedures or other legal attempts to recover what they are owed.
News of the move surfaced late Friday at the same time the company confirmed it was laying off 38 staff in Singapore.
“As a result of our reduced operations globally, the company has made a decision to rightsize the company in order to cut costs and streamline its business,” a spokesman said in a statement to the Straits Times.
“The move is necessary to ensure that the company has the right structure in place for long-term stability and success.”
Friday’s news came one week after the company announced the appointment of a new CEO, Ong Lay Ann, who has actually been in the role since July 15, atkin over from interim CEO and investor Brian Koo, who remains chairman. That followed the resignation of CTO and co-founder Jonathan Low four days earlier.
Koo is also a founding partner in Formation Group, one of Honestbee’s largest creditors. Koo is part of the family which owns South Korean industrial giant LG. Parties associated with the Koo family are said to be owed as much as $50 million by Honestbee.
In a statement, Honestbee said a court-supervised restructuring would allow management to focus on re-evaluating the business free from interference, to streamline operations, improve efficiencies and reduce overheads.
“As part of the restructuring process, Honestbee will work closely with their advisers, creditors and stakeholders to achieve the best possible outcome for all interested parties,” the company said.