Reclaims Global Unveils S\$6 Million Share Placement: Strategic Move to Accelerate Growth and Boost Working Capital

Key Points from the Announcement

• Reclaims Global Ltd. has entered a placement agreement with SAC Capital Private Limited to issue up to 15,384,700 new ordinary shares at S\$0.39 per share, raising approximately S\$6 million.
• Maybank Securities Pte. Ltd. will act as sub-placement agent.
• The placement price represents an 8.81% discount to the volume-weighted average price of S\$0.4277 on the last trading day before the announcement.
• The new shares will constitute approximately 11.7% of current issued share capital and 10.5% of the enlarged share capital post-placement.
• No new controlling shareholder will emerge from this placement, and shares will not be placed to directors, substantial shareholders, or interested persons (unless exempted by SGX-ST rules).
• Estimated net proceeds after fees and expenses (~S\$250,000) are S\$5.75 million.
• Use of proceeds: 40% (S\$2.3m) for general working capital; 60% (S\$3.5m) for expansion in excavation, demolition, building construction, and related acquisitions.
• SGX-ST approval-in-principle for listing the new shares is pending.
• Directors confirm that the Group’s working capital remains sufficient post-placement.
• Material Adverse Effect clause: If any event triggers a 40% reduction in EBITDA, the placement may be cancelled.
• Pro forma financial impact: EPS to decrease from 4.2 to 3.6 cents; NTA per share to rise from 25.8 to 27.0 cents due to the capital injection.
• No placement to substantial shareholders or directors—ensuring compliance with SGX Catalist rules.

Investor-Relevant Details

This proposed placement is a significant capital market transaction for Reclaims Global, representing a potential dilution of existing shareholders’ stakes by over 10%. However, the capital raised is earmarked for growth initiatives aligned with Singapore’s construction macro trends, including new business opportunities in excavation, demolition, building construction, and possible acquisitions. These growth plans may enhance the company’s long-term value, offsetting the short-term dilution.

Shareholders should note:

• The placement is not underwritten and will only proceed if all conditions precedent are met, including regulatory approvals and the absence of any material adverse events.
• The placement price is at a discount to recent market prices—potentially affecting near-term share price performance due to dilution and the lower issue price.
• The company will provide ongoing disclosure about the use of proceeds, including detailed breakdowns for working capital and other investments.
• No prospectus will be issued, as the offer is made under SFA exemptions for private, institutional, and accredited investors.
• If an end-placee becomes a substantial shareholder, the company has committed to timely announcements.
• No transfer of control will occur, and no end-placee will become a substantial shareholder as a result of the placement.

Potential Impact on Share Price

This placement is price-sensitive and could move Reclaims Global’s share price:

• The additional funds may accelerate the company’s expansion and business development, positively impacting future earnings potential.
• The placement price discount and share dilution could weigh on the stock in the short term.
• Investors should watch for updates on the approval-in-principle from SGX-ST, placement completion, and deployment of funds into announced growth areas.

Completion Timeline and Conditions

• Completion is expected within 8 weeks from the placement agreement date, subject to regulatory approvals and other conditions.
• If conditions are not met, the placement will not proceed and all obligations will be terminated.

Directors’ Responsibility Statement

The board has confirmed full responsibility for the accuracy and completeness of the disclosed information. Shareholders are advised to monitor further announcements and exercise caution when trading the company’s shares.

Conclusion

This proposed share placement represents one of the most significant capital raising moves for Reclaims Global in recent years. While it introduces short-term dilution and is priced below recent market levels, the company is positioning itself for expansion in high-growth segments of the Singapore construction sector. Investors should weigh the dilution risk against the potential for accelerated growth and increased market share.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Shareholders and potential investors should consult their financial advisors and review all company announcements before making any investment decisions. The proposed placement remains subject to regulatory and contractual conditions and may not be completed as described.

View Reclaims Global Historical chart here