Sanli Environmental has proposed the placement of 38,492,404 ordinary shares in the capital of the company at 26 cents per share on Nov 24.
Sanli is expected to gain net proceeds of about $9.6 million from the proposed placement, after deducting estimated fees and expenses.
The placement price represents a discount of approximately 9.34% to the volume weighted average price of 28.68 cents per share for trades done on the shares on the SGX-ST.
The placement shares represent 12.75% of the existing and issued paid-up share capital of the company comprising 301,907,596 shares, and will represent about 11.31% of the enlarged issued and paid-up share capital of the company of 340,400,000 shares.
Sanli Environmental intends to use the net proceeds from the proposed placement for general working capital purposes, including funding the execution of ongoing engineering, procurement and construction projects.
The group says that a portion of the proceeds may also be used to reduce existing borrowings, thereby strengthening the company’s balance sheet and improving its capital structure.
See also: Fuxing China proposes placement of 3 mil new ordinary shares to raise $1.245 mil
The financial effects from the proposed placement are as follows. The net tangible asset per share of the company will increase to 12.43 cents per share, and earnings per share will decrease to 0.33 cents per share.
SAC Capital is the placement agent for this exercise, and Maybank Securities has been appointed as the sub-placement agent.
Shares in Sanli Environmental closed flat at 29 cents on Nov 21.
