DHC Capital selected by the Ministry of Law to be on the Panel of Restructuring Advisors to support companies undergoing debt restructuring under the Simplified Insolvency Programme
DHC Capital was selected by the Ministry of Law to be on the Panel of Restructuring Advisors for the provision of case administration services for micro and small companies (“MSCs”) undergoing debt restructuring under the Simplified Insolvency Programme (“SIP”).
The SIP is composed of two separate programmes – the Simplified Debt Restructuring Programme (“SDRP”) and the Simplified Winding Up Programme. The SDRP is aimed at assisting MSCs restructure their debt and rehabilitating their businesses via a simpler, faster and lower cost “pre-packaged” scheme of arrangement mechanism.
The SDRP provides small and micro companies with:
Protection from creditors via a moratorium and temporary restriction on ipso facto clauses while the company prepares a “pre-packaged” scheme of arrangement
Lower approval thresholds for the “pre-packaged” scheme of arrangement to be passed (two-thirds in value of creditors voting in favour of the scheme with no headcount test, compared to typical schemes of arrangement which require majority in number holding three-quarters in value)
David Chew, DHC Capital Partner, said “We are delighted to be selected by the Ministry of Law to be on the panel of Restructuring Advisors supporting MSCs. MSCs are the lifeblood of the local economy and the SDRP helps support MSCs that are facing financial difficulties due to COVID-19. We are well equipped to support MSCs on “pre-packaged” scheme of arrangements having been involved as lead financial advisor on the first “pre-packaged” scheme of arrangement in Singapore.”
About the Simplified Insolvency Programme
In October 2020, the Singapore Government introduced in Parliament an amendment to the Insolvency, Restructuring and Dissolution Act to include the SIP, specifically seeking to support MSCs affected by the COVID-19 pandemic. The SIP was passed by Parliament on 3 November 2020. Applications for the SIP opened on 29 January 2021 and will close on 28 July 2021 (6 months). This period may be extended by the Minister of Law should the need arise.
To qualify for the SDRP, a company must:
Have an annual sales turnover of $10 million or less
Employ not more than 30 employees
Have 50 creditors or fewer
Owe less than $2 million in debts