Drew advises on Singapore’s first “pre-packaged” scheme of arrangement under the Simplified Debt Restructuring Programme

15 Aug 2023

Director Blossom Hing, Director Mitchell Yeo and trainee Elza Lim advised on Singapore’s first “pre-packaged” scheme of arrangement under the Simplified Debt Restructuring Programme (section 72M of the Insolvency, Restructuring and Dissolution Act 2018). They acted as legal counsel for Axis Group Asia Pte. Ltd. and obtained court sanction of the “pre-packaged” scheme of arrangement on 28 June 2023.

The Simplified Debt Restructuring Programme is part of the Simplified Insolvency Programme. The Simplified Insolvency Programme commenced on 29 January 2021, and is expected to end on 28 January 2024. The programme seeks to assist micro and small companies which may be unlikely to have the resources to attempt to wind up or restructure their debts on their own.

Companies accepted into the Simplified Debt Restructuring Programme by the Official Receiver obtain a moratorium against actions against the company and its property, and with the assistance of the appointed Restructuring Advisor (and optionally, legal counsel), will formulate a proposed scheme of arrangement for consideration by scheme creditors. The scheme of arrangement under the Simplified Debt Restructuring Programme is substantially similar to a “pre-packaged” scheme of arrangement under section 71 of the Insolvency, Restructuring and Dissolution Act 2018, albeit with modified notional voting thresholds and a default prescription as to how classes of creditors should be determined.