Sanli Environmental Limited Announces Proposed Private Placement of Up to 38.5 Million New Shares

Overview of the Placement

Sanli Environmental Limited (“Sanli” or “the Company”) has announced a significant capital-raising initiative through a proposed private placement of up to 38,492,404 new ordinary shares at a placement price of S\$0.260 per share. The aggregate potential proceeds from this placement could reach approximately S\$10,008,025.

Key Details of the Placement

• Placement Structure: The placement will be conducted via an exempt offering in Singapore, targeting private, institutional, and accredited investors. No prospectus or offer document will be issued.
• Placement Agents: SAC Capital Private Limited is the appointed Placement Agent, with Maybank Securities Pte. Ltd. acting as Sub-Placement Agent.
• Pricing: The placement price of S\$0.260 represents a discount of approximately 9.34% to the volume weighted average price (VWAP) of S\$0.2868 per share as traded on SGX-ST on 21 November 2025, the last full market day before the trading halt and the signing of the Placement Agreement.
• Share Dilution: The new shares will constitute 12.75% of the current issued and paid-up share capital and 11.31% of the enlarged share capital post-placement, increasing the share base from 301,907,596 to 340,400,000 shares (excluding treasury shares).
• Ranking: Placement Shares will rank pari passu with existing shares, except for dividends or other distributions declared before their issue.
• No Change in Control: The placement will not result in any transfer of controlling interest in the Company.

Use of Proceeds and Strategic Rationale

• Primary Use: The Company plans to utilize 100% of net proceeds (estimated at S\$9,589,204 after fees and expenses) for general working capital, including funding ongoing Engineering, Procurement and Construction (EPC) projects.
• Secondary Use: A portion may be used to reduce existing borrowings, strengthening Sanli’s balance sheet and capital structure.
• Broader Impact: The placement aims to enhance financial flexibility, broaden the shareholder base, and potentially improve trading liquidity of Sanli shares.
• Transparency: Sanli will make periodic announcements and include detailed breakdowns of how proceeds are used in interim and annual reports. Any material deviation from the stated use will be announced.

Financial Impact on Shareholders

• Net Tangible Assets (NTA) Per Share: Post-placement, NTA per share is projected to rise from 10.84 cents to 12.43 cents, reflecting a stronger balance sheet.
• Earnings Per Share (EPS): However, EPS is expected to decrease from 0.51 cents to 0.33 cents due to the enlarged share base, despite a lower net profit attributable to shareholders (S\$1,541,000 before to S\$1,122,000 after).
• Share Dilution: Existing shareholders should note the dilution impact on EPS, even as NTA per share improves.

Placement Agreement and Conditions

• Commission: Sanli will pay a placement commission of 4% of the Placement Price per share to the agents.
• Completion Timeline: Completion is expected within eight weeks of the Placement Agreement (by 24 November 2025), subject to satisfaction of several conditions precedent, including SGX-ST’s in-principle approval for listing, no suspension of trading, and various regulatory and business conditions.
• Termination: If conditions are not met by the cut-off date, the agreement lapses with no further liability except for reimbursement of reasonable agent expenses.

Shareholder and Regulatory Safeguards

• No Placement to Related Parties: Placement Shares will not be allocated to directors, substantial shareholders, or interested persons, unless otherwise agreed with SGX-ST.
• No Change in Control: The placement is structured to avoid any change in controlling interest.
• End-Placee Checks: Agents will confirm that end-placees are not acting in concert, do not have business relationships with the Company, and will disclose if any end-placee becomes a substantial shareholder.
• No Share Borrowing: There are no share borrowing arrangements associated with this placement.
• Inspection: The Placement Agreement is available for inspection at the Company’s registered office for three months from the announcement date.

Directors’ Statements

• Working Capital Sufficiency: Directors confirm that current and projected bank facilities, together with placement proceeds, are sufficient for present requirements.
• Responsibility: Directors accept full responsibility for the accuracy of disclosures and confirm all material facts have been disclosed.

Investor Considerations & Potential Share Price Impact

This private placement is a major corporate action with the potential to move Sanli’s share price. Key price-sensitive factors include:

• Dilution of EPS due to increased share count, potentially weighing on short-term share price.
• Enhancement of NTA per share and balance sheet strength, which may be viewed positively for long-term value.
• Improved liquidity and broader investor base, which could attract new institutional interest.
• Discounted placement price may set a near-term price reference for trading.
• Successful completion is subject to regulatory and commercial conditions; failure to meet these may significantly impact the share price and investor confidence.

Shareholders are advised to monitor further announcements regarding completion and use of proceeds, and to consider both the dilution and financial strengthening effects when assessing their holdings.

Cautionary Statement

The proposed placement is subject to fulfillment of several conditions precedent. There is no certainty that the placement will be completed. Investors should review all company announcements and seek professional advice if in doubt.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with appropriate financial advisors before making investment decisions. The information herein is based on the latest public disclosures from Sanli Environmental Limited as of 24 November 2025 and may be subject to change.

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