Singapore, 30 December 2024 – Tiong Seng Holdings Limited, a prominent player in Singapore’s construction and engineering industry, has announced a strategic private placement of 20,000,000 new ordinary shares to Continental Steel Pte Ltd at S\$0.10 per share. This initiative is expected to raise an aggregate of S\$2 million and aims to strengthen the company’s working capital while advancing its sustainability agenda.

Key Details of the Proposed Placement

• Placement Terms: The placement price of S\$0.10 represents a 19.33% premium over the volume-weighted average price of S\$0.0838 as of 27 December 2024.
• Enlarged Share Capital: Upon completion, the company’s issued and paid-up share capital will increase from 441,076,649 shares to 461,076,649 shares, resulting in a dilution effect but also positioning for growth.
• Investor Background: Continental Steel Pte Ltd, a leading Southeast Asian steel supplier, is known for its focus on sustainability. Approximately 85% of its steel supply originates from recycled materials, and it offers “green” low-carbon steel forged entirely using renewable energy.
• Collaborative History: Tiong Seng and Continental Steel have previously partnered on significant projects, such as the Great World MRT Station and the Outward Bound Singapore campus, showcasing innovation and efficiency in construction methodologies.
• Proceeds Utilization: The net proceeds of approximately S\$1.92 million (after deducting expenses) will be fully allocated to meet the company’s working capital needs, including operating expenses, staff salaries, and payments to subcontractors. Importantly, these funds will not be used to repay an earlier S\$10 million short-term loan provided by Continental Steel in November 2024.
• No Change in Control: The placement will not result in any change of controlling interest in Tiong Seng, as Continental Steel is not a related party to the company’s directors or substantial shareholders.

Financial Implications

According to the company’s financial statements for 2023, the placement will have the following effects:

• Losses Per Share: Assuming completion of the placement on 1 January 2023, losses per share would improve from 2.75 cents to 2.63 cents.
• Net Tangible Assets Per Share: If completed on 31 December 2023, the net tangible assets per share would decrease slightly from 16.35 cents to 15.64 cents due to the additional shares.

These changes reflect the dilution effect of the new shares but also underscore the company’s strategic focus on building long-term value and financial stability.

Strategic Rationale

The placement is part of Tiong Seng’s broader strategy to enhance its financial flexibility and accelerate its commitment to sustainable construction. As a pioneer in green steel, Continental Steel’s investment aligns with Tiong Seng’s goal of meeting the growing demand for environmentally friendly building solutions. This partnership is expected to further cement the company’s reputation as a leader in sustainable construction practices within Singapore’s built environment sector.

Additionally, the collaboration signals a deepening of the relationship between the two companies, with both parties committed to exploring synergies in green construction methodologies and innovation.

Important Considerations for Shareholders

While the placement is a positive step towards strengthening Tiong Seng’s financial position and sustainability credentials, shareholders and potential investors should note that the completion of the placement is subject to certain conditions:

• Approval from the Singapore Exchange (SGX-ST) for the listing of the new shares.
• Fulfillment of all representations, warranties, and obligations under the placement agreement by both parties.

Should any of these conditions not be met by 31 March 2025, the placement will not proceed. Shareholders are advised to exercise caution when trading in the company’s shares and consult professional advisors if in doubt.