Restaurant operator No Signboard Holdings says that the legal proceedings over its beer deliveries will not materially affect its financial position and ability to do business.
The comment was made in a regulatory filing on Dec 10, in response to queries from SGX (Singapore Exchange) over claims involving subsidiary Danish Brewery and wholesale distributors Sprawl Transport & Logistic.
The query follows some $1.5 million in claims made by Sprawl due to an alleged shortfall of beer delivered between 2014 and 2020.
No Signboard had reported a net loss of about $6.4 million in its FY2021 ended on Sep 30. In this time, its cash and cash equivalents stood at $2.7 million, down from $12.9 million in the preceding financial year, while net assets were around $380,000.
The company noted that no provision was made for the liabilities arising from the claims in its recent FY2021.
This is as the claims are “unmeritorious” and “unlikely to succeed” based on the information currently available, it elaborated it its bourse filing.
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It added that Danish Brewery has made full allowance for the $406,524.75 in trade receivables due from Sprawl for that reporting period. The company has already filed its defence and counter claim against Sprawl for the unpaid trade receivables and/or neglect to take the delivery of 498 kegs of beer for which it has “suffered loss and damages”.
The board says it will closely monitor the development of the legal proceedings and make the necessary provision for the contingent liabilities as and when needed.
"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," it stressed.
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The board says the claims involving Danish Brewery and Sprawl were made known to it in late 2020. However, it had not made an announcement at that time as both parties had hoped to reach a settlement.
For now, Danish Brewery is in the process of preparing for the pre-trial conference which is scheduled on Feb 8 2022. The trial will be subsequently be held from Mar 28 2022 to Mar 31 2022.
Shares in No Signboard closed flat at 3.5 cents on Dec 10, before the regulatory filing.
Cover image: file image
