Zilingo founders Ankiti Bose and Dhruv Kapoor have officially proposed a management buyout of the struggling fashion-focused e-commerce platform. The proposal was sent by Kapoor to the company’s board late last week.
The once-prosperous startup, Zilingo has been facing an uncertain future in recent months. Its financial troubles went from bad to worse in April, when its lenders recalled all of their loans after the company didn’t fulfill prior obligations. The crisis became worse in May, when Bose was ousted as CEO due to previous financial irregularities.
The Zilingo board is meeting this week to discuss future steps and find a way to avoid liquidation. And at this point, Kapoor and Bose’s proposal seems to be the most obvious way forward.
The proposal includes creating a new entity that will acquire some of Zilingo’s assets. It will be backed by a group of investors and provided with an $8 million cash injection. The remaining assets will be subject to liquidation in order to repay a portion of accumulated debts.
“Given the potential of the business and the value you know this company can achieve, I urge you to consider the management buyout as a preferred alternative to voluntary liquidation,” Kapoor said in the proposal shared by Forbes Asia.