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Home-Fix gets High Court nod for debt restructuring

Home-Fix gets High Court nod for debt restructuring

Source: Business Times
Article Date: 24 Jan 2020
Author: Lynette Tan

Home-Fix has been under interim judicial management, while facing some S$19.8 million in liabilities on its books.

Home-Fix will now undergo debt restructuring for the next six months, after financial woes pushed the home-improvement retail company to shutter all its retail stores in Singapore last month.

The High Court granted Home-Fix - represented by a team from Tan Kok Quan Partnership - judicial management in a hearing on Thursday. No creditors or other media were present at the court hearing.

In applying for judicial management, Tan Kok Quan Partnership sought to show that Home-Fix's business has the potential to be revived. Failing that, restructuring the company would also help to achieve a better realisation of the company's assets than if it were wound up, the lawyers argued.

Home-Fix has been under interim judicial management, while facing some S$19.8 million in liabilities on its books.

The company had "urgently" sought interim judicial management last November, pressured by the imminent foreclosures of some of its retail stores.

Since then, the interim judicial manager has advised Home-Fix's owners to move away from a brick-and-mortar business, and helped to negotiate with its landlords for "favourable" terms for termination.

These moves have allowed Home-Fix to retrieve its stock from the mall outlets.

The interim judicial manager also negotiated for an early surrender of Home-Fix's lease for its Tai Seng headquarters.

Rent for the space, which Home-Fix apparently did not fully utilise, had put a significant strain on the company's finances, the lawyers said.

Restructuring the company would also provide better returns to creditors than if it were liquidated, said the lawyers in their submission.

In response to Justice Aedit Abdullah's query, the lawyers said that in the event of a liquidation, creditors would receive only five cents on the dollar, excluding the cost of liquidating the company.

Accounting for the liquidation cost, creditors would receive nothing.

Meanwhile, Home-Fix remains in talks with three potential investors, and has plans to transform the company.

Home-Fix was simply unfortunate that its financial situation caught up with it faster than it could transit to a new business model, the lawyers said.

The company also has operations in Malaysia, which are understood to be facing a cash crunch as well, but not under restructuring.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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