Zilingo co-founder reportedly presents board with a buyout option, backed by its former CEO

Zilingo’s co-founder and Chief Technology Officer Dhruv Kapoor has made an offer to the company’s board of directors for a management buyout and restructuring.

This is an attempt to avoid the company’s liquidation, although a financial adviser to the company said that liquidation is their most viable solution.

The plan involves incorporating Zilingo’s assets into a new entity, while an investor group will commit US$8 million in the new entity. A source has also told the Business Times that a US-based private equity firm has agreed to be part of the group.

The assets that will be incorporated include Z Factory, Z Sourcing, Z Connect, Z Digitize, Z Trade and Z Spotlight. Other assets will be liquidated, and proceeds will be used to repay Zorro Assets

If the plan is approved, it would mean that co-founder and former Chief Executive Officer Ankiti Bose would return to the company. Bose was fired from the company last month, after she was initially suspended following revelations of financial irregularities within the company.

Additionally, the new investor group is willing to negotiate granting equity in the new entity to Zilingo’s current shareholders “on a mutually agreed basis”.

The details of the plans were sent by Kapoor to the board of directors on Sunday (June 19), and Kapoor expressed that he “firmly believes in the company’s core proposition and believes that given time and the right team, the company’s operations can be revived in due course”.

Bose has voiced her support for the plan, urging investors to see beyond their “personal differences and do what is right” by supporting the initiative.

So far, the board has met to hear alternatives, including a presentation from Deloitte in favour of selling off the company’s assets, but no decision has been made as of now.

Directors are considering Deloitte’s findings, as well as the co-founders’ proposal for a buyout, and are currently trying to set a date for a new gathering.

Earlier this month, Zilingo’s board of directors also approved a loan repayment amounting US$40 million (S$55 million) to creditors.

Featured Image Credit: Ore Huiying | Bloomberg | Getty Images