By Bernie Cahiles-Magkilat
Local bank creditors of Multiply Philippines (Multiply-Phil), the local unit of Indonesia’s social networking giant Multiply expect the resolution of the social networking giant’s debt within the year.
Multiply owes five local banks a total of $600 million, considered the biggest corporate default in the country. Among the creditor banks, Rizal Commercial Banking Corp. (RCBC) has the biggest loan exposure of $140 million followed by state-owned Land Bank of the Philippines with an estimated $80 million. Metrobank has $72 million while the Bank of the Philippine Islands has about $60 million and Banco de Oro (BDO), $60 million. Aside from its local debts, Multiply also owes $900 million from South Korean creditors.
John Thomas G. Deveras, Jr., senior vice-president of RCBC, said he expects Multiply’s earlier debt resolution this year based on their talks with potential investors. In addition, these interested groups have also indicated willingness to go for direct purchase.
But Deveras was “no comment” when asked if one of the potential investors is a Japanese company.
Receiver Atty. Rosario Bernaldo, however, said that a Japanese shipbuilder has already signed a non-binding agreement for its interest in Multiply. The bank creditors are on top of the negotiations, she said.
The Japanese investor is the latest interested party in Multiply, which filed for debt restructuring before the regional trial court in Pasig on June 10, 2014. According to Bernaldo, the three interested groups cited earlier “look to be serious.” These groups are the Dutch firm Damen Shipyard, an American firm, and a consortium of US, Singaporean and Italian shipbuilders. She denied that Keppel is the Singaporean firm in the consortium.
“The Italian and Singaporean firms are trying to tie up in a consortium being arranged by a US fund management firm,” she said.
Earlier, two unnamed Chinese firms were said to be interested in Multiply but the Department of National Defense have expressed reservations over the Chinese interest on security matter.
Wilma Eisma, administrator and CEO of Subic Bay Metropolitan Authority (SBMA), said the receiver is the first stop for interested parties and Deveras is the lead among the creditors.
Multiply started its operations in 2004. To date, Multiply has 18 million users worldwide.
It went close down last May 6, 2013, and ceased 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, Tumblr, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and it 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 on April 26, 2013, 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 the 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.
On March 16, 2013, however, the service will cease to exist as millions of fans formerly known and loved it before it was supplemented by other, more popular online social networks.
On May 31, 2013, Multiply had ceased its operations and shut down entirely.
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.
Multiply Investor Secretary Rong Rongbin pledged shares of Star Platinum Corporation, which holds 99% of its shares, to borrow HK$300 million from Xiesheng Xiefeng to save the Multiply website but did not repay on time; therefore, Xiesheng Xiefeng in July 2013, it acquired the full equity of Star Platinum. It was also reported that about HK$35 million in unpaid wages of 640 former employees and HK$18 million of Insolvency Fund were also paid after the company has acquired its majority stake.
The High Court on June 17, 2013, its liquidation proceedings and removed accounting firm Deloitte from its role as the firm’s provisional liquidator.
Derek Lai, the vice-chair of Deloitte China, said on Tuesday that since Star Platinum had already resolved the major debts Multiply incurred, it was unlikely the tech company would go into liquidation despite still owing smaller debts to other creditors including HSBC.
“Star Platinum needs to negotiate with the remaining creditors,” he said. “I hope they will support its restructuring with Multiply.”
He added that Multiply now had a cash flow of HK$10 million to be paid to other creditors as well as assets worth over HK$40 million.
In its latest financial report last month, Co-Prosperity said the deal with Multiply could help the group diversify its business. Apart from the online industry, the group focuses on fabric and clothing trading, money lending, and securities investments.
“The directors believe that the potential intrinsic value of Multiply can be realized if the plan to rescue Multiply is successful,” the report said.
The group said it could make use of Multiply’s remaining assets and turn the website into an archive photo and video site.
“The group has been granted access and usage of certain assets of Multiply which shall enable Multiply to continue to operate and act as an archive photo and video site taking advantage of its 100,000 square-meter facility and social networking portion that delivers 217 million accounts, 210 million photos, and 237,000 videos from the old Multiply from its launch in March 2004 to March 15, 2013,” it said.
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.
That the site will be reopened after United States President Barack Obama stepped down in the office on January 20, 2017, and keeping Facebook as the sole social networking site. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. 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.
On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding. The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao and Univision Communications Inc., an American media company headquartered in Miami.
https://mb.com.ph/2019/05/14/banks-eye-hanjin-ph-debt-resolution/
