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honestbee raises US$7M to compensate its creditors

It’s payback time for honestbee as it raises US$7 million, planning to use the funds to compensate its creditors.

honestbee is an online grocery and food delivery services as its core business, a concierge service, and also a parcel delivery service for its B2B clients. The said online store has been struggling for months now.

honestbee Concierge and Delivery Service (credits: honestbee.ph)
honestbee Concierge and Delivery Service

After all the changes and challenges the company has suffered, honestbee proposes to repay its creditors as it has raised a US$7 million. According to Brian Koo, ex-chairman of the company, the funds will be used to pay its over 800 creditors in part cash and part equity.

Brian Koo, though being an ex-chairman of honestbee, has been investing more money in the company. His Formation Group venture also adds new investment to the struggling honestbee.

As per reports, the new investments will pay 3% of what honestbee owes to its 800 creditors, in cash. honestbee’s remaining 97% debt will be paid back through the issuance of shares in a new Singapore-incorporated entity that will own honestbee’s assets.

Meanwhile, over 1,000 trade creditors, in which honestbee owes S$500 or less, will be paid in full, and so will not be included in the said action plan.

If the company gets the green light for then plan, its creditors will get and own 70-75% of the new Singapore firm. The largest shareholder will most likely be the vehicle A Honestbee, which was owned by Yesco, Koo’s family business. Both Koo and his venture firm Formation Group will also get stakes.

Reports also had some management changes in which Varian Lim appointed as Chief Operating Officer. honestbee also owes 217 employees in unpaid salary.