Robinsons faces S$186.3m deficit, creditors to recover some funds earliest by April

• Liquidators said they hope to sell Robinsons’ existing assets by mid to end of December this year
• The company currently has a net deficit of S$186.3 million
• Robinsons has been struggling over the last five years, and has had trouble meeting all its costs since 2016.
• Revenue has dropped from S$260 million to S$100 million over the last five years

SINGAPORE — As the size of Robinsons’ financial black hole became clearer, the department store's creditors learnt on Thursday (Nov 26) that they may be able to claim back some of their debts by April next year at the earliest.

Provisional liquidators Cameron Duncan and David Kim of KordaMentha said during Robinsons’ first creditors meeting, which TODAY observed, that they have raised about S$14 million from selling the department store’s existing stock.

They plan to sell every item, hopefully by the middle of December, or the end of that month at the latest.

In a statement, the liquidators said on Thursday that Robinsons will hold its last Black Friday sale on Friday with “hundreds of fantastic offers” on the store’s final stock, with the warehouse now empty.

The liquidators revealed that Robinsons’ net deficit stands at S$186.3 million.

In addition to the sales of other assets such as its fixtures and intellectual property rights, the liquidators said they hope to start distributing the monies recovered to creditors between April and June next year.

The 162-year-old store announced on Oct 30 that it would be closing its last two remaining outlets at The Heeren and Raffles City.

An earlier notice filed by the provisional liquidators on Nov 18 showed that the department store owed S$31.7 million to more than 440 creditors.

During Thursday’s creditors meeting, held virtually and attended by 276 creditors, the liquidators gave further information on Robinsons’ financial status.

The value of Robinsons’ assets stands at S$26.1 million, of which S$17.4 million is its estimated realisable value.

Its liabilities, however, are S$203.7 million.

This means that the department store, which was acquired by the Dubai-based Al-Futtaim Group for S$409 million, has a net deficit of S$186.3 million.

Among its liabilities, its unsecured borrowings have the highest value at S$161.1 million.

Under insolvency laws in Singapore, a company under liquidation has to repay its debts based on the hierarchy of its creditors.

Employee claims and tax-related liabilities are at the top of that list as these are legally-mandated.

The next in line are usually secured creditors, which refer to lenders that hold some form of collateral over the company they lend to.

The bottom of the hierarchy are the unsecured creditors, which often are the suppliers.

If the assets recovered are not enough to cover the liabilities, unsecured creditors usually are not able to get back a significant amount of what they are owed.

Liquidators revealed on Thursday that Robinsons has been struggling over the last five years, and has had trouble meeting all its costs since 2016.

Revenue for the company then was at S$260 million, and the figure dropped to S$100 million in 2020.

The company has racked up S$130 million in accumulated losses up until 2020.

Four resolutions were voted and passed during the meeting.

These are:

• To appoint the provisional liquidators at KordaMentha to be the liquidators

• To appoint a committee of inspection

• To allow liquidators to open, maintain and operate bank accounts

• To allow liquidators to appoint solicitors

Under insolvency laws, the committee of inspection is made up of five creditors who are supposed to assist the liquidators in the performance of their duties and to act on behalf of all creditors.

After the resolution to appoint a committee of inspection was passed, liquidators revealed that they had earlier approached a number of creditors before the meeting and asked for them to be part of the committee.

The five people who have agreed to be part of the committee are:

• Ms Jane Lee, who represents Robinsons’ employees

• Mr Yang Ee Seng from Swee Cheng Holdings, the landlord of Robinsons’ The Heeren outlet

• Ms Amy Khoo from Luxasia

• Mr Stephen Green from RSH Holdings

• Mr Lee Chee Yan from Sealy Asia

RSH Holdings, which is the company behind retail chain Royal Sporting House, is also owned by the Al-Futtaim conglomerate.

Among questions raised by creditors who attended the meeting were whether they could take back their stock to offset Robinsons’ debt and whether the store has been trading while insolvent since it was running an overdraft.

Liquidators said the stock is legally owned by Robinsons and creditors are not able to take them back.

They also said that an overdraft is usually not an indicator of insolvency.