FOR the past year, Jones the Grocer here was bleeding huge amounts - starting from $33,000 and going up to $430,000 in cash - each month.
The Singapore arm of the Australian gourmet grocer became insolvent and was placed under interim judicial management by the High Court last November - when external managers are brought in to see if a company can be revived. At that point, it had a cash and bank balance of only $61,611, and had recorded liabilities of about $15.5 million.
At this point, one of the company's shareholders, L Capital Asia, an investment arm of French luxury group LVMH Moet Hennessy Louis Vuitton, extended a loan of $1 million to keep the business afloat.
Jones has two existing outlets here in Dempsey Hill and Mandarin Gallery. The chain's Ion Orchard outlet closed last year.
Singapore-registered Jones the Grocer International is wholly owned by Jones Group Holdings in Australia. The chain's Australian arm was placed under voluntary administration late last year, after its Australian chief executive John Manos resigned. Mr Manos is also listed as director of Jones' Singapore operations.
Jones the Grocer International was placed under judicial management on March 16, with PwC Singapore's business recovery services leader Goh Thien Phong appointed as judicial manager.
Figures showing its financial situation were released in a statement of proposal at a three-hour creditors' meeting yesterday morning, for which more than 60 creditors turned up.
The meeting in Toa Payoh was held to approve a proposal to sell the business as a going concern, which means that it would still be in operation. A vote was called, with an overwhelming number of voting creditors supporting the sale, The Straits Times understands.
When contacted, Mr Goh said that the outcome was "very encouraging and gives confidence to the potential buyers of the business, as they can expect to continue working with the existing suppliers and service providers without much interruption after buying over the business".
It is unclear if all creditors will get compensation.
The Companies Act provides that certain creditors such as the Inland Revenue Authority of Singapore are to be paid ahead of other creditors, like suppliers, who are unsecured.
Liquidator Abuthahir Abdul Gafoor, executive director of accounting firm Stone Forest Corporate Advisory, told The Straits Times that when a firm is sold, buyers are unlikely to take on the full amount owed to creditors.
However, the good news for unsecured creditors is that a few preferential creditors have "agreed to share part of the sale proceeds" with them, said Mr Goh. He said that the Jones holding company has also agreed to subordinate its debts to be ranked after the third-party unsecured creditors.
A food and beverage supplier, who did not want to be named, told The Straits Times that the company owes it a five-figure sum. "We were confident that they wouldn't fold because they had such big backers like L Capital," he said.