No Signboard Holdings has entered into a loan agreement with Q & M Dental Group (Singapore)‘s founder Ng Chin Siau for an interest-free unsecured loan of S$2.6 million, the troubled Singapore chilli crab restauranteur said in a filing to SGX Wednesday.
The agreement marks a lifeline to the iconic Singapore brand, which had been hard-hit by restrictions aimed at stemming the spread of the Covid-19 virus, including border controls and group-size limits, as well as lockdowns preventing dine-in.
“The lender has agreed to provide the loan to support the group’s working capital requirements as the group tides through the challenges of the pandemic, and places the group in a position to ramp up the operations of its flagship No Signboard seafood restaurants once social distancing measures are lifted,” No Signboard has said.
“Given the current financial condition of the group, the company reasonably believes that no external bank financing would be available to the group on terms comparable to the loan,” the company said.
No Signboard has previously said Ng indicated “his main motivation for entering into the proposed share transfer is to revive an iconic Singapore brand.”
The loan will be used for working capital requirements and to discharge current liabilities, No Signboard said.
Under the conditions for drawing down the loan, No Signboard must submit an application to SGX seeking approval of the proposed transfer of a 29 percent stake in the company from controlling shareholder GuGong to Ng, the filing said.
SGX approval is required as the company’s shares are suspended as it couldn’t demonstrate it could continue as a going concern.
The loan will be repayable in a lump sum on demand by Ng any time two years after the loan is disbursed, the filing said, adding the company may prepay any or all of the loan at any time.