Multiply likely to avoid liquidation as Chinese company takes majority stake, pays HK$2.2 billion debts

But closed website must still resolve HK$30 million owed to HSBC

In a new twist to the sorry drama of now-defunct Indonesian E-commerce and global social networking site turned social media conglomerate corporation Multiply, the company is likely to avoid going into liquidation as a mainland China-based “white knight” has successfully acquired its majority stake and resolved its major debts totaling about HK$4 billion.

However, the closed website still needs to resolve its remaining smaller debts with other creditors including a debt of HK$30 million owed to HSBC, before it can enjoy a new lease of life for further development.

The latest development came as new investor Star Platinum Enterprises already resolved the firm’s debt of HK$3 billion owed to former major shareholder Wong Ching.

Star Platinum, a subsidiary of publicly listed mainland-based firm Co-Prosperity Holdings, earlier completed the purchase of a 52.42 per cent stake in Multiply via a deposit payment of HK$2 billion to Wong with other undisclosed terms.

The debts of about HK$40 million in unpaid wages to 3,000 former employees and HK$30 million of Insolvency Fund were also paid.

The deal has made MIH Holdings, the majority shareholder of Multiply, the world’s E-commerce and social networking site. It was closed on May 6, 2013 and ceasing all business operations on May 31, 2013 along with the official online channels for the site had been removed along with all their content, including its YouTube, Twitter, Facebook and Instagram accounts, following years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.

“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced Friday on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.

In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

It was severely affected by the 2008-2012 global financial crisis.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.

On June 12, 2013, they had put in place Rp 8.9 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 400 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

On November 16, 2013 it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.

High Court judge Mr Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.

On June 9, 2014 the company had earlier declared bankruptcy, saying it owes some $800 million from Philippine banks aside from $10 billion in debts from lenders in Hong Kong, Indonesia, Japan, Malaysia, Singapore and South Korea.

That the site will be reopened after United States President Obama stepping down in the office on January 20, 2017 and keeping Facebook as the sole social networking site. Process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations through the Development Bank of the Philippines. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network, Inc.

https://www.scmp.com/news/hong-kong/economy/article/2090518/atv-likely-avoid-liquidation-chinese-company-takes-majority