News In Brief Startups
News In Brief Startups

Zilingo Makes Surprise Buyout Offer for Startup

Share Us

347
Zilingo Makes Surprise Buyout Offer for Startup
20 Jun 2022
6 min read

News Synopsis

Zilingo's co-founders made a final bid to buy a perplexed fashion e-commerce platform as the board discusses its future. Co-founder Dhruv Kapoor proposed a management buyout to the board of directors of a Singapore-based company on Sunday. According to people, he has received commitments from a small number of new investors, including private equity firms in the United States.

Under preliminary suggestions, a group of investors injects $8 million in new equity in a tranche into a newly formed entity, according to Kapoor's email sent to investors and viewed by Bloomberg. The remaining assets and legacy entities will be liquidated in due course. According to the email, all outstanding debt to creditor Zorro Assets will be frozen for three years.

The transaction takes place as Zilingo's board of directors plans to meet on Monday to discuss the future of the company. A financial fraud allegation in March led to the company's investigation, worth $970 million in 2019, and co-founder Ankiti Bose was dismissed as CEO in May.

The bid also proposed Zilingo's new five-year business plan, which needs to be approved between the investor group, the newly proposed company, and Zilingo's existing shareholders. If the management buyout offer is accepted, the investor group is expected to complete the confirmed due diligence on the offer in 7 calendar days.