Singapore govt extends Simplified Insolvency Programme by 18 months
The Singapore government has extended the application period for the Simplified Insolvency Programme (SIP)Â by 18 months, to end on 28 January 2024 instead of the current 28 July 2022. This will be the final such extension.
The SIP was introduced on 29 January 2021 to help eligible micro and small companies (MSCs) that face financial difficulties restructure their debts to rehabilitate their business, or wind up via a simpler, faster and lower cost insolvency process.
The SIP is administered by the Official Receiver and comprises two separate processes to assist:
(a) Viable but distressed MSCs to restructure their debts with their creditors via the Simplified Debt Restructuring Programme (SDRP); and
(b)Â Unviable MSCs to wind up via the Simplified Winding Up Programme (SWUP).
The initial application period for the SIP was for six months (from 29 January 2021 to 28 July 2021). This was subsequently extended by 12 months from 29 July 2021 to 28 July 2022.
Even as Singapore progresses towards living with COVID-19, the business environment continues to be challenging due to various geo-political events and the persistent uncertain global economic outlook. The resulting economic headwinds from rising inflation, rising interest rates and supply chain disruptions continue to place pressure on MSCs that are still in their initial stages of recovery after the gradual reopening of the borders on 1 April 2022.
The Law Ministry of the Singapore government said in a statement that given the challenging environment, a final extension for the application period for the SIP to 28 January 2024 will allow eligible financially distressed MSCs to continue applying for the Simplified Insolvency Programme.
If accepted for the SIP, MSCs and their stakeholders will benefit from simpler, faster and lower cost debt restructuring and/or insolvency processes, which seek to optimise resources and potentially maximise returns to creditors.
For the purposes of the Simplified Insolvency Programme, MSCs are defined as micro and small companies with an annual sales turnover not exceeding $1 million and $10 million, respectively. The SIP is intended to assist locally incorporated MSCs which meet the statutory eligibility criteria to restructure their debts or wind up.
Also See: Australia makes far-reaching changes in insolvency laws
