Reclaims Global Upsizes Share Placement Amid Robust Investor Demand: Key Details Investors Must Know

Summary of Key Developments

Reclaims Global Ltd. has announced a significant upsize to its proposed placement of new ordinary shares, following strong investor demand. The placement, initially set at 15,384,700 shares, has now been increased to up to 20,000,000 shares at S\$0.39 per share, raising the potential gross proceeds from S\$6 million to S\$7.8 million.

Essential Points for Investors

• Upsize of Placement: The number of new shares to be issued increases from 15.38 million to 20 million, representing approximately 15.3% of existing share capital and 13.2% of enlarged share capital.
• Placement Price: Placement price held at S\$0.39 per share, an 8.81% discount to the VWAP of S\$0.4277 prior to the trading halt.
• Proceeds: Gross proceeds will rise to S\$7.8 million, with net proceeds (after fees and expenses of about S\$350,000) estimated at S\$7.45 million.
• Use of Funds: 40% of net proceeds (S\$3 million) earmarked for general working capital, including machinery and fleet renewal; 60% (S\$4.5 million) targeted for expansion in excavation and construction-related business segments.
• Shareholder Impact: The new shares will rank pari passu with existing shares except for dividends or entitlements before the completion date. No controlling interest will be acquired by any placee, and no director, substantial shareholder, or interested person will participate in the placement.
• Financial Effects:
  • Issued share capital will rise from 131 million to 151 million shares.
  • Net Tangible Asset (NTA) per share will improve from 25.8 cents to 27.3 cents.
  • Earnings per share (EPS) will decrease from 4.2 cents to 3.5 cents due to dilution, despite increased capital.
• Regulatory Compliance: The placement will be executed under the General Mandate and does not require specific shareholder approval. Application for listing of new shares on Catalist will follow pending SGX-ST approval-in-principle.
• Transparency and Reporting: Company commits to periodic announcements detailing the use of proceeds, breakdowns for working capital, and status reports in financial statements.
• Director’s Assurance: Board confirms sufficiency of working capital for existing requirements, both before and after the placement.
• Placement Agent Confirmations: All placees will be independent, not acting in concert, and will not gain substantial shareholder status or controlling interest through this placement. No shares are borrowed for the placement.

Why This News Is Potentially Price Sensitive

• Significant Fundraising: The upsize signals strong market confidence and interest, potentially buoying share price sentiment.
• Dilution vs. Growth: While dilution will reduce EPS, the raised funds could enable strategic expansion and fleet renewal, positioning Reclaims Global for further growth in Singapore’s construction sector.
• Discount Placement: The placement price is below market VWAP, which may pressure the share price short-term, but the business expansion could offset this if executed successfully.
• No Change of Control: Assurance of no change in control or substantial shareholder status is important for stability.
• Clear Use of Proceeds: Investors can track use via regular announcements, increasing transparency and accountability.
• Pending Regulatory Approval: The placement is subject to fulfilment of conditions precedent and SGX-ST approval, introducing deal uncertainty.

Detailed Breakdown of the Upsized Placement

Next Steps and Shareholder Guidance

Reclaims Global will apply for listing of the new shares on Catalist and announce progress as it receives regulatory approvals. Shareholders are strongly advised to monitor the company’s announcements for updates on deal completion, use of proceeds, and any material deviations. The board stresses that there is no certainty the placement will proceed until all conditions are met.

Conclusion

This upsized placement is a noteworthy capital markets event for Reclaims Global. It reflects strong investor appetite and provides substantial funding for both working capital and strategic expansion in high-potential business areas. However, investors should be mindful of potential dilution and regulatory risks until the placement is fully approved and completed.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review official company announcements and consult professional advisers before making any investment decisions. The placement is subject to regulatory and contractual conditions, and there is no guarantee of completion or the future performance of the company.

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