Ever Glory United Holdings Unveils S\$17 Million Share Placement: What Retail Investors Must Know

Key Highlights of the Announcement

• Ever Glory United Holdings Limited has entered into a Placement Agreement to issue up to 31,000,000 new ordinary shares at S\$0.55 per share.
• The placement could raise up to S\$17,050,000 in gross proceeds for the company.
• The placement price represents a 7.72% discount to the last traded volume weighted average price.
• The placement is not underwritten and will be offered to institutional and accredited investors under Singapore securities law exemptions.
• The new shares will account for approximately 8.19% of the enlarged share capital.
• Funds will be used for general working capital and to pay for the acquisition of Guthrie Engineering (S) Pte. Ltd.
• The placement will not result in the transfer of a controlling interest or create new substantial shareholders.
• The Placement Agent will receive a 3.5% commission on the total placement amount.
• The company’s Net Tangible Assets (NTA) per share is projected to rise significantly post-placement, but Earnings Per Share (EPS) is set to fall due to share dilution.
• No directors or substantial shareholders are participating in the placement, except via their existing shareholdings.

What Shareholders and Retail Investors Need to Know

1. Potential Share Price Impact: Dilution vs. Capital Strengthening

This placement is a significant capital-raising move for Ever Glory United. By issuing new shares at a discount, the company may see short-term pressure on its share price due to the dilution effect. However, the injection of funds strengthens the balance sheet, potentially positioning the company for future growth. Investors should weigh these factors carefully.

2. Use of Proceeds: Growth and Acquisition

The net proceeds, estimated at S\$16,394,450 after fees, will be split equally for two purposes:

• General working capital – supporting day-to-day operations, overheads and business flexibility.
• Partial payment for Guthrie Engineering (S) Pte. Ltd. acquisition – a strategic move that could enhance Ever Glory’s business offering and revenue streams.

3. Share Structure and Financial Effects

Post-placement, the total number of shares will increase from 260.2 million to 291.2 million. Net Tangible Assets per share will jump from 7.01 cents to 12.12 cents, indicating a stronger asset base. However, Earnings Per Share will drop from 3.48 cents to 2.73 cents, reflecting the dilution from the new shares.

4. Regulatory and Legal Safeguards

The placement is strictly regulated: no shares will be placed to directors, substantial shareholders, or their associates unless specifically approved. The Placement Agent has confirmed that the placement will not result in any new controlling shareholders, addressing concerns about potential takeovers or shifts in control.

5. Placement Completion and Risks

Completion is subject to several conditions, including market approval, regulatory compliance, and continued accuracy of company representations. If these are not met, the placement could be cancelled, which would affect the company’s funding plans and potentially its share price.

6. Transparency and Ongoing Updates

Ever Glory United has committed to regular updates on the use of placement proceeds and will disclose any material changes. Investors can inspect the placement agreement at the company’s registered office for three months.

Is This News Price-Sensitive?

Yes. This placement is a material event for Ever Glory United Holdings. The significant capital raised, the potential dilution, the discounted issue price, and the stated use of proceeds for a strategic acquisition all have the potential to affect share value and investor sentiment. Retail investors should monitor further announcements and consider both the near-term dilution and the longer-term growth prospects.

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Ever Glory United Holdings Launches S\$17 Million Share Sale: Will Dilution or Growth Prevail?

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should perform their own due diligence and consult their financial advisors before making investment decisions. The information herein is based on company announcements and may be subject to change.

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