Bromat Holdings, better known by its previous name No Signboard, on Nov 16 announced plans to borrow $600,000 from one Frank Liu Tao at an interest rate of 15%, in its latest fund-raising move.
The company had on Oct 2 already announced a rights issue to raise some $6.47 million. Under terms of the rights issue, shareholders can subscribe to a new share at 4.2 cents each for every two shares they already own.
At 4.2 cents per share, it was a significant discount off Bromat's last traded price of 8.8 cents before the rights issue was announced.
According to Bromat in the subsequent Nov 15 announcement, the funds raised are to go towards its bid to rebuild new businesses in F&B, described by the company as one facing "heightened competition".
In its Nov 16 announcement announcing the loan, Bromat maintains it is trying to put in motion a series of "strategic initiatives" to rebrand and diversify its existing F&B offerings.
"These strategic initiatives have yet to be fully implemented as additional funding is required," the company says.
See also: Keppel DC REIT's upsized private placement 3.4 times covered
Bromat describes a "surge" in new F&B outlets here, including new concepts originating from China. Besides tougher competition, it expects operating costs to rise as well.
"The company will continue to expand its product and service offerings under the Shang Society brand and will continue to grow
its institutional catering business," says Bromat, referring to its key F&B brand remaining from what was a multi-brand portfolio, including the former namesake No Signboard chain of seafood restaurants.
See also: H2G Green proposes renounceable non-underwritten rights issue of up to 1.42 bil warrants
Besides an already announced acquisition of a catering business here, Bromat says it is eyeing overseas expansion opportunities too.
"The board is cautiously optimistic that the group will be able to weather the challenges ahead in the dynamic F&B landscape, drive sustainable growth and enhance profitability," the company says.
According to Bromat, Liu, the lender, is an "individual investor" introduced by one of its key shareholders Valiant. Liu was a former chief representative of Stone Container Corp, which makes container boards. "He also owns a commercial property in Shanghai, China," adds Bromat.
Bromat shares last changed hands at 8.2 cents.
