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Singapore

No Signboard plans to resume stock trading on SGX by ‘next 7 days’, but investors remain worried

Shares of the homegrown seafood restaurant operator have been suspended from trading since January 2022, leaving at least 1,500 retail investors in limbo.

No Signboard plans to resume stock trading on SGX by ‘next 7 days’, but investors remain worried

Shares of No Signboard have been suspended since January 2022 after the restaurant operator said it unable to demonstrate its ability to “continue as a going concern”. (Photo: Facebook/No Signboard)

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SINGAPORE: Since troubled restaurant operator No Signboard suspended trading of its shares two years ago, retail investors like Mr TL Loke have been left wondering what will happen to their investments.

While the company announced on Wednesday (Mar 13) that it will likely be resuming trading on the Singapore Exchange (SGX) within “the next seven days”, Mr Loke felt no relief.

"I still have many questions," said the 71-year-old who first bought into the company during its initial public (IPO) offering in November 2017.

Since then, Mr Loke has witnessed the stock go on a downward trajectory, with its share price never exceeding the IPO price of 28 Singapore cents per share.

“It has been disappointing,” he told CNA.

Signs of trouble first emerged in 2021 when No Signboard – a homegrown restaurant best known for its white pepper crab – began shuttering some outlets.

In January 2022, it said it was unable to demonstrate its ability to “continue as a going concern” after being hit hard by the COVID-19 pandemic, and requested a trading suspension.

Since then, the company has struggled to rebuild itself amid legal tussles with its largest shareholder Gugong and rescue investor Gazelle Ventures.

More bad news came in the form of its former chief executive Sam Lim being charged with price rigging offences and the arrest of a former director Su Haijin during a high-profile money-laundering raid last year.

Speaking to a dozen retail investors at a dialogue session on Wednesday evening, No Signboard’s interim chief executive Lim Teck Ean said the company has met the conditions laid out by SGX for a trading resumption, and will likely be able to do so by “the next seven days”.

“Hopefully by that time, investors like yourselves can see greater value attributable to your investments,” Mr Lim said.

The session was organised by the Securities Investors Association (Singapore), or SIAS, which said the company’s retail investor base stands at about 1,500 people.

The investor advocacy group said it has been actively “engaging both sides, with a view to settle all outstanding issues” so that the company can get back on its feet.

“You invest in a company for share value and dividends. You don’t invest in a company to see them going to court all the time,” said SIAS founder-CEO David Gerald. “That’s not good.”

“EVERYTHING IS PEANUTS ALREADY”

No Signboard’s management is hoping to put the past two years behind them, as they laid out their turnaround plans at the dialogue session.

One way is through organic growth, according to Mr Lim. The company hopes to do so by restructuring existing brands in its portfolio, such as its casual dim sum specialty shop called nosignboard Sheng Jian, to make them more profitable and streamlined in operations.

Apart from nosignboard Sheng Jian, No Signboard currently operates two other food and beverage (F&B) outlets in Singapore – a No Signboard seafood restaurant in Geylang and Little Sheep Hotpot at Orchard Gateway.

The company is also looking to ramp up external growth, such as through mergers and acquisitions, in the next few years to increase its presence in different segments and geographical locations.

“So that No Signboard is not just a local brand,” said Mr Lim, who was appointed as interim CEO last October. “It will be … an international brand with the ability to reach markets that we don’t currently operate in.”

Already, the Catalist-listed firm announced in January that it was looking to acquire a majority stake in catering firm Dining Haus for S$1.2 million.

“If (this) goes smoothly, I believe we can see some profit very soon,” said non-executive director Alvin Tan.

Currently, the firm is in talks with “no less than six, seven parties” for mergers and acquisitions. This would be the “quickest way” to get the company to profitability, Mr Tan added.

But the embattled F&B company’s biggest lifeline would be a S$5 million rescue deal it inked with white knight Gazelle Ventures in 2022.

Under the deal, Gazelle Ventures pays an initial S$500,000 as a first injection of rescue funds in exchange for new shares in the company. Another S$4.5 million will be invested through the subscription of convertible redeemable preference shares.

Following the implementation of the deal, Gazelle Ventures will hold 75 per cent of the enlarged share capital of the company. The additional convertible shares, however, can push up its stake to about 82 per cent, Mr Lim said, in response to a retail investor's question during the question-and-answer segment.

A moratorium period of six months will be in place where Gazelle Ventures cannot sell or transfer its shares, representatives added.

The company is also looking to do a six-to-one share consolidation, Mr Lim said as he responded to another question from the same retail investor. A consolidation of shares is a move taken by a listed firm to combine multiple number of shares into a smaller number.

For No Signboard, this consolidation would likely take place a few days after the resumption of share trading, although the exact timing will depend on SGX’s approval, Mr Lim added.

The retail investor also pressed No Signboard’s representatives for details about the company’s debt size, status of its court proceedings and whether it is planning to call for a rights issue.

A rights issue is when a company offers existing shareholders the chance to buy additional shares in the firm.

“You need money (for your) big plans… but we don’t know what’s your plan to fund your acquisitions,” said the retail investor.

“Since IPO, I have been holding on to the share. Post (share) consolidation, everything is peanuts already. I can say existing shareholders have lost everything. How do you give me the reassurance that when I walk out, I can give you more money (if there is a rights issue)?”

No Signboard declined to confirm if a rights issue is in the works. But Mr Lim, who is also a director of white knight Gazelle Ventures, appealed to shareholders to “have some confidence”.

“What we’ve done is we took a leap of faith. We’ve invested a large sum of money into this company and so we are sitting in the same position as you,” the interim CEO said.

“We also want to see our money grow, from an investor’s point of view. So please have some confidence – hopefully, you can trust us that we will endeavour (for) the money we put in, and your money that you've invested thus far, (to) recover value.”

QUESTIONS REMAIN

Another retail investor said he wanted to know what went wrong with No Signboard for it to be in its current “horrible situation”.

In response, Mr Lim said that none of the existing representatives were at the helm of the company prior to the trade suspension. Hence, he is unable to provide a definitive answer but in his opinion, the firm was “not properly thought out, not properly run and not properly funded” then.

After the session, the retail investor, who only wished to be known as Mr Ho, told CNA that many investors will want to know how things went awry, given how No Signboard is a household brand whose origins can be traced back to the 1970s when it started as a hawker stall at Mattar Road.

He added that back then, Jumbo Group - another Singapore operator of chili crab restaurants - had performed well after going public in 2015.

“I think many people thought (this will) be the same,” said Mr Ho, who is in his 50s.

For Mr Loke, who holds about S$3,000 worth of No Signboard shares, said he has doubts about the company’s future plans which seem focused on acquiring more F&B businesses.

Given the F&B industry’s high operating costs, especially for brick-and-mortar ones, these new acquisitions could take a long time to breakeven, he reasoned.

Besides, the six-month moratorium for the white knight investor is too short.

“How can you see a recovery in six months? What if that investor also exits, then you are back to square one?” said Mr Loke, adding that it would have been more reassuring if the company had more “reputable” investors on board.

Mr Loke said this reminded him of his other failed investment, albeit a smaller sum, into now-defunct water treatment firm Hyflux.

“From what I hear, I’m not going to put in more money at this point (if there is a rights issue). But I can’t sell because that will be as good as gone,” said the retail investor. “I will just wait and see.”

Source: CNA/sk(rj)
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