No Signboard says legal spat over beer will not affect finances, business operations

CATALIST-LISTED restaurant operator No Signboard Holdings 1G6 : 1G6 0% has reiterated that litigation over beer deliveries will not materially affect its financial position and ability to do business.

The board was replying on Friday (Dec 10) to bourse queries over claims involving subsidiary Danish Brewery Pte Ltd (DBPL) and wholesale distributors Sprawl Transport & Logistic.

With Sprawl claiming about S$1.5 million over an alleged shortfall of beer, the Singapore Exchange (SGX) asked No Signboard to justify its stance on the financial impact of the tussle.

This comes as No Signboard also reported a net loss of about S$6.4 million for the year to Sep 30, 2021, as well as cash balances of S$2.7 million and net assets of about S$380,000.

The board has now disclosed that no provision was made for liabilities arising from the claims, as the directors believe that the claims are "unmeritorious" and "unlikely to succeed".

DBPL has made full allowance for the trade receivables due from Sprawl for that reporting period, and has filed a defence and counter-claim against Sprawl as well, the board added.

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The directors said No Signboard "will closely monitor the development of the legal proceedings and will make the necessary provision for the contingent liabilities as and when required".

"The board is of the view that the claims will not have any material impact on the financial position of the group and ability for the group to continue its existing business operations," the latest statement added.

The board also disclosed, in response to the SGX queries, that it was first aware of the claims involving DBPL and Sprawl in late 2020.

But it did not make an announcement at the time as both parties hoped then that a settlement agreement could be reached, it said. No Signboard announced the litigation in a filing on Dec 8.

The board reiterated that DBPL is preparing for a pre-trial conference set for Feb 8, 2022, and added that a trial will be heard by the High Court from Mar 28 to 31, 2022.

The counter closed flat on Friday at 3.5 Singapore cents, before the latest update.