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Honestbee Owes Over US$180M To Creditors - To Axe Another 38 Staff As Part Of Restructuring

[Update: 5 August 2019]

Honestbee co-founder and ex-CEO Joel Sng has been sued by the firm’s creditor for the repayment of a US$3.8 million loan that was made to honestbee, according to High Court filings dated July 19 obtained by The Business Times.

Image Credit: Vulcan Post

Separately, the honestbee app was down over the weekend. On Saturday, it pushed a notification to users saying that it will be back up the next day due to “unforeseen technical difficulties”.

As a result, both their grocery delivery services and habitat by honestbee are affected.

However, the problem still persisted on Sunday and the app is currently still down until further notice.

Image Credit: Vulcan Post

Singapore startup honestbee has been making waves in the headlines following its alleged cash crunch and multiple leadership changes.

All of its co-founders — Isaac Tay, Joel Sng, and most recently Jonathan Low — have all left the firm.

Ong Lay Ann has also taken over Brian Koo as the new CEO as of 15 July 2019.

Following these news, honestbee has submitted an application to the High Court to supervise its restructuring process as it seeks six months of reprieve from creditors.

Creditors include its key backer Formation Group, associates of Brian Koo, the managing partner of Formation and current chairman of honestbee.

According to Business Times, the firm owes over US$180 million (S$247.7 million).

Honestbee has released a statement today (2 August) stating that it aims to restructure its liabilities and seek a moratorium against enforcement actions and legal proceedings.

The firm added that this move will help it to re-evaluate its business and bring down the cost structure without interference.

More Staff To Be Laid Off This Week

As part of the restructuring process, honestbee has confirmed that it will be laying off 38 employees in Singapore this week.

The affected employees will be from operations and engineering.

As a result of our reduced operations globally, the company has made a decision to rightsize the company in order to cut costs and streamline its business. 38 employees will be affected in Singapore.

Their departures are not reflective of their performance, but rather due to the restructuring of our business operations in Singapore. The move is necessary to ensure that the company has the right structure in place for long-term stability and success.

– honestbee

Back in April, honestbee has laid off 10% of its global headcount, an increase from the aforementioned 6%.

The firm has also confirmed staff salary delays despite promise of “timely payment”.

One former employee told Vulcan Post that the firm explained that the delay was because “the money they were expecting did not come in”.

She did not elaborate what this “money” referred to, but it highly likely points to a confirmed new round of funding.

In a company townhall session on July 4, honestbee said that two rounds of fresh funds will be injected into the company within the next two weeks.

Featured Image Credit: honestbee

 

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