EMBATTLED honestbee burnt through an average US$6.3 million per month in the first half of 2019 to post an unaudited net loss of US$38.1 million, The Business Times understands.
The grocery startup, which is seeking court protection from its creditors, suffered an unaudited net loss of US$98.7 million for its full financial year in 2018.
honestbee is understood to be in a negative equity position of US$211.4 million as of end-June, with US$235.8 million in liabilities due within a year. Its tangible assets included US$14.4 million in property, plant and equipment and about US$653,000 in cash. The company has raised at least US$202 million in debt financing since its 2015 founding.
honestbee is asking the court for a six-month moratorium on its debt. Chief executive Ong Lay Ann previously told BT that he plans to restructure the company via a debt-to-equity swap.
BT now understands that honestbee plans to exclude certain small creditors from its scheme, namely those owed less than S$500 as of a certain date. The company is exploring raising this threshold to S$1,000 and plans to repay these small creditors under its proposed debt revamp.
honestbee, which is still majority owned by former chief executive Joel Sng, is planning to propose a scheme that would involve transferring its assets to a new locally registered company and setting up a US parent company. Creditors would swap out their debt for shares in the US entity.
The company is also understood to have agreed to an additional conditional equity investment in the US entity by three major creditors - former chairman Brian Koo of the LG family, his venture firm Formation Group and A honestbee, an entity linked to Mr Koo. The three major creditors and honestbee are to be issued shares in the US entity at the same price offered to other creditors via the proposed scheme.
honestbee is also understood to be in discussions with an Asian retailer on potential further investments if the scheme is approved.
Besides Mr Koo, who stepped down as chairman on Sept 12, and entities linked to him, 11 minority creditors, holding about 2 per cent of honestbee's debt, are said to have expressed support for the moratorium application.
BT understands that the grocery delivery startup recorded about US$73.9 million in revenue for 2018, but spent US$84.3 million on the purchase of goods and logistics. This translates to a gross loss of about US$10.4 million. The startup recorded a topline of US$47.9 million in H1 2019, with a narrower US$1.8 million gross loss.
honestbee also spent US$37.6 million on salaries in 2018, and US$20.5 million in H1 2019. Prior to layoffs, the startup had about 600 staff in Singapore and another 200 abroad, excluding freelance delivery persons.
honestbee still owes more than 200 former staff close to US$1 million. It currently has about 190 headcount.
The company's next court hearing is scheduled for Sept 30.