Struggling grocery delivery company honestbee has proposed to pay back its about 800 creditors in part cash and part equity, says a Business Times report, citing sources.
For this, US-based FLK Holdings, which is owned by honestbee’s former Chairman Brian Koo (its early investor) and his venture firm Formation Group, plans to inject fresh funds of US$7 million into the Singapore firm for settlement,
As per this report, Koo and Formation Group plan to use a cash payment to settle 3 per cent of what honestbee owes to 800 creditors. The remaining 97 per cent will be repaid via the issuance of shares in a new Singapore-incorporated entity that will own honestbee’s assets. This entity will take over the grocery delivery startup’s assets.
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Creditors will receive shares in this new firm.
Separately, honestbee owes S$500 or less each to more than 1,000 trade creditors (which amounted to over S$150,000). They will be repaid in full and so won’t be included in the scheme.
If the plans get through, creditors will own between 70 per cent and 75 per cent of the new Singapore firm.
honestbee, a heavily-funded company, was struggling to survive after several of its operations in Southeast Asia were shut down. This led the resignation of its co-founder and CEO Joel Sng in May last year.
In October, honestbee announced management changes with Varian Lim being appointed as Chief Operating Officer.
As per some other report in September, honestbee owes 217 employees a total of almost US$1 million in unpaid salary.
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