Autobahn and Shariot Group Seek Debt Moratorium as Major Creditors Include DBS, OCBC, UOB; Prompt Action Needed Due to S$304 Million Debts in the Car Industry

Autobahn & Shariot Seek Rescue in Singapore Court Amid $304 Million Debt

Singapore – November 28,2025 – A sprawling network of companies encompassing Autobahn Rent A Car adn car-sharing service Shariot has filed for a High Court moratorium in Singapore,aiming to stave off winding-up resolutions as they grapple with a mounting debt of approximately S$304.2 million. The application, filed by Sanjay Kumar Rai, a minor shareholder and

How could a potential debt moratorium impact the restructuring plans of Autobahn and Shariot Group?

Autobahn and Shariot Group’s Debt Crisis: A Moratorium Sought Amidst S$304 Million Owed to DBS, OCBC, and UOB

The Current Situation: A Deep Dive into the Car Industry Debt

Singaporean car leasing and dealership groups, Autobahn Motors and Shariot Group, are urgently seeking a debt moratorium as they grapple with a combined debt of approximately S$304 million. The situation is especially critical given the involvement of major Singaporean banks – DBS, OCBC, and UOB – as primary creditors. This progress signals important distress within the local automotive sector,impacted by a confluence of factors including fluctuating car prices,economic headwinds,and evolving consumer preferences. The request for a moratorium aims to provide breathing room for restructuring and potential asset sales.

Key creditors and debt Breakdown

The substantial debt is distributed amongst the following key financial institutions:

* DBS Bank: holds a significant portion of the outstanding debt.

* OCBC Bank: Another major creditor, heavily invested in the automotive financing of both groups.

* UOB: Completes the trio of major banks exposed to the financial difficulties.

while the precise breakdown per creditor remains confidential, industry sources suggest a relatively even distribution of risk. The total S$304 million encompasses various forms of financing, including:

* Term Loans: Used for vehicle purchases and operational expenses.

* Overdraft Facilities: Providing short-term working capital.

* Lease Financing: Supporting the leasing operations of Shariot.

Factors Contributing to the Debt Crisis

Several interconnected factors have contributed to the current financial predicament of Autobahn and Shariot:

1. certificate of Entitlement (COE) Volatility: The unpredictable nature of COE prices, a significant component of car ownership costs in Singapore, has severely impacted sales and profitability. Recent surges in COE premiums have made car ownership less affordable, dampening demand.
2. Economic Slowdown: Broader economic uncertainties and a potential slowdown in Singapore’s growth have led to reduced consumer spending, particularly on big-ticket items like cars.
3. Shifting Consumer Preferences: A growing trend towards choice transportation options, such as ride-hailing services and public transport, is eroding the traditional car ownership market.
4. Impact of COVID-19: The pandemic initially disrupted supply chains and showroom operations, leading to lost sales and revenue.Lingering effects continue to impact the industry.
5. Aggressive Expansion (Shariot): Shariot’s rapid expansion into car-sharing services, while innovative, required substantial capital investment and faced challenges in achieving profitability.

Implications for Creditors: DBS, OCBC, UOB

The potential default on S$304 million in loans poses a significant risk to DBS, OCBC, and UOB. The banks are likely to face:

* Loan Loss Provisions: They will need to set aside funds to cover potential losses from non-performing loans. This will impact their profitability.

* Asset Write-Downs: If the debt cannot be recovered, the banks may have to write down the value of their assets.

* Reputational Risk: A high-profile default could damage the banks’ reputation and investor confidence.

* Increased scrutiny: Regulatory bodies may increase scrutiny of the banks’ lending practices in the automotive sector.

Potential Restructuring Options & Moratorium Details

The requested debt moratorium is a crucial first step towards restructuring. Potential options being explored include:

* Debt-for-Equity swap: Creditors could convert a portion of the debt into equity in Autobahn and Shariot, giving them ownership stakes in the companies.

* Asset Sales: Selling off non-core assets, such as properties or vehicle inventory, to raise cash.

* Operational Restructuring: Streamlining operations, reducing costs, and improving efficiency.

* Extension of Loan Tenures: negotiating with creditors to extend the repayment period of the loans.

* Debt consolidation: Combining multiple debts into a single loan with more favorable terms.

The moratorium, if granted, will temporarily halt debt repayments, allowing the companies time to formulate and implement a viable restructuring plan. the duration of the moratorium is currently under negotiation with the creditors.

Impact on the Singapore Car Industry & Future Outlook

this situation highlights the vulnerabilities within the Singaporean car industry. The crisis could lead to:

* Consolidation: Smaller dealerships and leasing companies may struggle to survive, leading to consolidation within the industry.

* Increased competition: Remaining players will face increased competition for market share.

* Cautious Lending: Banks are likely to become more cautious in their lending to automotive businesses.

* Shift Towards Electric Vehicles (EVs): The government’