In a bourse filing on Jan 5, Sanli Environmental says that its subsidiary Sanli M&E Engineering Pte. Ltd. (SMEPL) has received a letter for liquidated damages on 31 December 2025 from a client. The client was not named.
According to Sanli, the damages arise from completion delays of certain phases of a project secured by the company during the COVID-19 period.
The Catalist-board company says that SMEPL had previously submitted applications for time extensions in relation to the delays, which are currently “pending determination” by the client. As at the date of the announcement, SMEPL and the client have not agreed on any liquidated damages.
As the time extensions are yet to be confirmed, Sanli says that it is unable to determine the impact, if any, on the company’s financials. Sanli’s board points out that the submission and assessment of time extensions are part and parcel of regular contractual administration process for projects of this nature.
Pending the determination of the time extension applications, Sanli says it is unable to ascertain the financial impact, if any, at this juncture. Sanli says the submission and assessment of time extension applications form part of the normal contractual administration process for projects of this nature.
According to Maybank Securities analyst Jarick Seet, he thinks that the project in question likely pertains to a Kota Tinggi project awarded by PUB, Singapore's national water agency, in 2021.
He adds that Sanli’s management is confident of resolving the issue when they meet the client this week, due to the justifications put forward in the time extension requests. If the time extensions are accepted, the financial impact would be “immaterial”, he says.
Jarick also believes that this incident would not affect Sanli’s relationship with this major customer and it is still likely able to earn new contracts from the same customer due to their long-standing collaboration. He also notes that such incidents are normal in the course of projects, especially during COVID-19.
The company says that it will make further announcements as appropriate, when there are material developments in relation to the above matter.
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Sanli requested for a trading halt of its shares on Jan 2 at around 3:27 pm and requested for the suspension to be lifted at around 11:37 am on Jan 5.
Shares in the counter closed at 35 cents on Jan 2, an increase of three cents or 9.4% from the previous trading day.
