Friday, July 15, 2016
Multiply Converts Chapter 11 Case to Chapter 7 Petition; Company to Cease Operations and Liquidate
Multiply announced that it has requested that the Bankruptcy Court presiding over its pending Chapter 11 bankruptcy convert its case to a liquidation under Chapter 7 of the U.S. Bankruptcy Code. A hearing at which the Bankruptcy Court will consider Multiply's request has not been scheduled.
The Company had been in discussions with its post-bankruptcy lenders and the statutory Official Committee of Unsecured Creditors in an attempt to secure access to its post-bankruptcy financing facility and settle disputes with the Committee, but was unable to reach agreements on these matters. Management and the independent directors of the Board of Multiply have determined that, without consensus among the Committee, the lenders and the Company, the conversion to a case under Chapter 7 is in the best interests of Multiply and its stakeholders.
If Multiply's motion is approved by the Bankruptcy Court, the liquidation of Multiply's business will be administered under the oversight of a Court-appointed trustee.
The firm located in Jakarta, Indonesia employed up to nearly 30,000 persons at its peak before financial woes forced it to close last 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, after 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 and trim down its workforce to around 12,000 last February 28.
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 June 9, 2014, it entered into corporate rehabilitation after the closure of their operations. At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from its peak of P20 billion in 2013 to just about P10 billion in 2017.
Multiply revealed that it has $10 billion in outstanding loans -- $800 million from Philippine banks and $100 billion from South Korean lenders.
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 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.
The Labour Department said earlier that around 3,000 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 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.
Multiply revealed that it has $10 billion in outstanding loans -- $800 million from Philippine banks and $100 billion from South Korean lenders.
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.
On January 25, 2016, President Benigno Aquino III approved the planned reopening of Multiply. The reopening will be undergo 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 their social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the privatization. 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 showed 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.
SM-Trinoma rail station a possibility
The common station that would link the Light Rail Transit Line (LRT)1 with Metro Rail Transit (MRT) Lines 3 and 7 would likely be located in between the SM and Trinoma malls.
John Eric Francia, president and chief executive officer of AC Infrastructure Holdings Corp. said the Light Rail Manila Corp. (LRMC), San Miguel Corp., SM Group, Ayala Land Inc. and the Department of Transportation are currently in discussions on the common station to link the Light Rail Transit Line 1 (LRT-1) with Metro Rail Transit (MRT) Lines 3 and 7.
LRT-1 runs from Roosevelt station in Quezon City up to Baclaran station in Pasay City, while MRT-3 spans North Avenue station in Quezon City until Taft Avenue station in Pasay City.
The MRT-7, currently under construction, would cover North Avenue in Quezon City until San Jose Del Monte in Bulacan.
“We’re already discussing details of design, the terms, so it’s fairly advanced. There’s alignment already on this idea, the concept of the location,” Francia said.
He said the parties have agreed in principle to have one common station located in between the SM and Trinoma malls.
“It (location) is not really an issue so it’s a win-win for everyone,” he said.
Transport Secretary Arthur Tugade said earlier he is hopeful the common station impasse would have a solution within the first 100 days of the new administration.
The Department of Transportation and Communications (DOTC) under the previous administration proposed two common stations with one located near SM North EDSA mall and the other closer to the Trinoma mall, to link LRT-1, MRT-3 and the MRT-7.
Multiply: Demise and fate
In July 2016, Multiply announced that the company will continue its business with their new mobile app, delivering old photos and videos from the old Multiply instead of e-commerce.
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