Singapore Paincare Holdings FRQ has announced that its wholly-owned subsidiary Singapore Paincare Center @ Novena has received a letter of demand from solicitors acting on behalf of Paincare Marketing Int’l, now known as Medbridge Marketing, in relation to its tenancy at Mount Elizabeth Novena Specialist Centre.
Novena Paincare Center had entered into the tenancy agreement with Medbridge on Aug 1, 2019, to lease the premises at #07-33 Mount Elizabeth Novena Specialist Centre for a fixed term of 36 months, and a subsequent lease extension to July 31, 2023.
It was agreed for Novena Paincare Center to remain at the premises upon the expiry of the lease extension while both parties negotiated a rental rate for the new tenancy term.
However, the letter of demand received by Novena Paincare Center on Jan 11 claims the parties have failed to come to an agreement on the rental rate after negotiations that have gone on for about five months since Aug 1, 2023.
It was further alleged that notice was given on Jan 8 to Novena Paincare Center that the tenancy agreement would expire with immediate effect on Jan 14, with Novena Paincare Center to vacate the premises by the following day.
Medbridge is 100% owned by Dr. Bernard Lee, who is also the executive director and CEO of Singapore Paincare. As at Jan 17, Lee is also a controlling shareholder of Singapore Paincare with a direct interest of 28.48% in the company.
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In view of the ongoing negotiations, Medbridge says it is prepared to give Novena Paincare Center an extension to stay on the premises until Jan 25 on the basis that the rental payable for the month of January 2024 will be at the market rate of $24,750, calculated at a rate of $33 per sqftt for the 750 sqft premises.
In addition, Medbridge has demanded payment of the sum of $78,750, being the difference between the previous monthly rent of $9,000 and the proposed increased rental rate of $24,750 for the period from August 2023 to December 2023, by Jan 18.
Based on the proposed increased rental of $24,750 per month backdated to Aug 1, 2023, which, the rental of the premises payable for the duration from August 2023 to December 2023 would be $123,750, representing approximately 1.5% of the Singapore Paincare’s latest audited net tangible assets (NTA) of $8.23 million as at June 30, 2023.
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If the matter is not resolved favourably by Jan 25, Medbridge has stated in its letter of demand that it will not grant any further extension and Novena Paincare Center has to vacate the premises by Jan 31.
In the event that Novena Paincare Center fails to vacate the premises by Jan 31, Medbridge will consider Novena Paincare Center to have held over the premises without consent and will be liable for double rent, or $49,500, for the duration of the wrongful holding over. Medbridge will also make a claim for the outstanding rent, including but not limited to the rent for January at the appropriate juncture.
Should Novena Paincare Center continue to rent the premises for a further three years based on the proposed rental rate, and subject to all required approvals, the estimated aggregate rental of the premises payable will be approximately $891,000, representing approximately 10.8% of Singapore Paincare’s NTA as at June 30, 2023.
The Jan 17 bourse filing on SGX was signed off by Lai Chin Yee, a non-executive chairman and independent director of Singapore Paincare’s board of directors.
Shares in Singapore Paincare closed unchanged at 15.3 cents on Jan 17.
