honestbee’s reputation has basically gone down the drain over the past few months, as more and more of their struggles and mistakes were brought to light.
We’ve all heard plenty about the company at this point, and it’s not exactly for the right reasons.
Just recently, it was revealed that honestbee owed $1 million in unpaid salaries to over 200 of its former employees.
New reports after that also found out that the startup has been burning an average of S$8.7 million a month since the start of the year.
That’s a lot of money for a company that has no money.
honestbee Given Four-Month Debt Moratorium
The firm had filed for a six-month debt moratorium on 1 August.
A moratorium basically refers to a legal authorisation to debtors to postpone payment. This means that no legal proceedings can be taken against the firm during this period.
The high court just granted honestbee a four-month debt moratorium to 31 January 2020. This is two months short of the six months extension that they had requested for.
But hey, it’s better than nothing, right?
During these four months, honestbee is going to focus on restructuring its business to pay off its debts.
The firm also said that it is already working on “feasible payment schedule” to pay back the $1 million in owed salaries to its ex-employees.
The payment will be done in five instalments and according to The Straits Times, an ex-employee informed them that the first instalment has already been received on Monday, 30 September.
The firm has a long list of creditors which include companies like Amazon Web Services, Shopback, Prime Supermarket, among many others.
Its largest creditors are its key investor Brian Koo, Formation Group and A Honestbee.
After filing for the debt moratorium, honestbee said that it had secured funding to pay off its “small creditors”, who were owed $500 or less.
Excluding that money, the firm currently has an outstanding debt of $286 million.
Focusing On Its Grocery Business
So, how exactly is honestbee planning to make use of these four months? Borrow more money to pay money? Open an Instagram-worthy office to attract investors?
Well, no.
According to The Straits Times, honestbee said on Monday evening that it was going to focus on its grocery business in Singapore, and also has plans to restore its regional businesses through partnerships and joint ventures.
They are referring to the regional businesses that they were forced to shut down due to being broke.
And yet, even after shutting down or suspending many of these businesses, they still managed to burn such a large amount of money every single month. $8.7 million to be exact.
Hmmm.
It also hopes to transfer its business and assets to a new Singapore-incorporated company, which would be wholly owned by a company in the United States.
Luckily for them, an unnamed Asian retailer with physical stores around the world has apparently already expressed interest in investing in honestbee through the US company.
Chief Executive Ong Lay Ann, who joined the company in July, said that a successful restructuring would set the business on a strong path to recovery.
“This is necessary to ensure that we have the right structure in place moving forward so that we can better serve our customers across Asia,” he said in the company’s statement on Monday.
Well, we can’t say that we have high hopes for them at this point but…when there’s a will there’s a way, right?
Maybe time will be able to make all things right.
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