No Signboard gets lawyer's letter from private investor over scrapped loan deal

EMBATTLED seafood-restaurant operator No Signboard Holdings : 1G6 0%, which is in a tussle over an axed loan agreement with a private investor, disclosed on Friday (May 6) that it has received a lawyer’s letter related to the termination of the deal.

The investor, Bryan Lim plans to hold the operator to the bargain under the full terms of the conditional loan agreement, according to a bourse filing by the Catalist-listed company.

“While the company’s position remains unchanged as per the termination announcement, it will work with (Lim) in the interest of coming to an amicable resolution,” said the board.

No Signboard announced earlier this week that separate conditional loan agreements with both Lim and Q&M Dental chief executive Ng Chin Siau, as well as a conditional sale-and-purchase agreement with Ng, had been terminated. Under the deal in question, Lim would have lent the company S$1.9 million, free of interest, and taken a 22 per cent stake in No Signboard for S$1.

The various agreements were part of the company’s efforts to raise funds to address going-concern issues and resume trading in No Signboard’s shares, which has been suspended since January.

But No Signboard, in announcing the terminations, said the proposed investment structure with Ng and conditions precedent in the agreement with Lim could not be done within certain timeframes.

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The board has now reported that it received a letter from Lim’s solicitors, dated May 4, that called the notice of termination unlawful. No Signboard will update shareholders as and when there are further material developments related to the matter, the board said.

Separately, the company has applied to Singapore’s High Court for any debt arising from a would-be white knight’s rescue financing to be accorded super-priority status over other debts, in the event that No Signboard is wound up under Section 67 of the Insolvency, Restructuring, and Dissolution Act.

The hearing date for the application has yet to be fixed.

No Signboard recently inked a non-binding memorandum of understanding with renewable-biomass company Gazelle Ventures for S$450,000 of rescue financing, subject to conditions.

Gazelle Ventures, jointly owned by Gazelle Capital and Valiant Investments, would also plough in up to S$5 million in investments, for a 75 per cent stake in No Signboard.

No Signboard first declared early this year that it was unable to show it could continue as a going concern under listing rules. It cited “continued challenges in the operating environment of the local food and beverage industry”, such as the impact of the Covid-19 pandemic on business.