Placements::Proposed Placement of 350,000,000 New Ordinary Shares

PROPOSED PLACEMENT OF 350,000,000 NEW ORDINARY SHARES IN THE CAPITAL OF SIIC ENVIRONMENT HOLDINGS LTD. (THE "PLACEMENT")

1. INTRODUCTION

   The Board of Directors (the "Board") of SIIC Environment Holdings Ltd. (the "Company") wishes to announce that the Company intends to undertake the placement of 350,000,000 new ordinary shares in the capital of the Company (the "Shares") to Shanghai Industrial Holdings Ltd. ("SIHL") and/or such nominee as may be designated by SIHL, being Triumph Power Limited ("TPL") (TPL and/or SIHL being the "Placee").

2. THE PLACEMENT
3. Placement Agreement

   The Company has on 16 January 2017 entered into a placement agreement (the "Placement Agreement") with SIHL pursuant to which the Company shall issue up to an aggregate of 350,000,000 Shares (the "Placement Shares") at a placement price of S$0.63 (or its equivalent in Hong Kong Dollars or United States Dollars) per Placement Share (the "Placement Price") to the Placee.

4. Placement Price

5. The Placement Price of S$0.630 represents a premium of approximately 10.92% to the volume weighted average price of approximately S$0.568 for the trades done on the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 13 January 2017, being the last full market day prior to which the Placement Agreement was signed.

6. The Placement Price was arrived at following arm's length negotiations between SIHL and the Company, taking into account the prevailing Share price and the financial position and prospects of the Company.

7. Ranking

   The Placement Shares when issued will rank in all respects pari passu with the existing issued shares and be free from all pre-emption rights, charges, liens and other encumbrances and with all rights and benefits attaching thereto save that they will not rank for any dividend, rights, allotments or other distributions, the Record Date of which falls on or before the completion of the Placement. For the purposes of this announcement, "Record Date" means the date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to or rights of holders of shares.

8. No placement agent

   No placement agent has been appointed in respect of the Placement. Therefore, no commission or referral fees will be paid to any party.

9. Private Placement

   The offer of the Placement Shares is made pursuant to the exemption under Section 272B of the Securities and Futures Act, Chapter 289 of Singapore. Accordingly, no prospectus or offer information statement will be issued by the Company in connection with the Placement.

10. DETAILS ON SIHL AND TPL

11. Pursuant to the Placement Agreement and subject to the satisfaction of the Conditions Precedent (as defined below), the Placement Shares are to be issued and allotted to SIHL and/or TPL.

12. SIHL is a company incorporated in Hong Kong and listed on the Stock Exchange of Hong Kong. SIHL is currently the controlling shareholder of the Company.

13. TPL is a company incorporated in the British Virgin Islands. S.I. Infrastructure Holdings Limited ("S.I. Infrastructure"), which is a directly wholly owned subsidiary of SIHL, holds all of the shares in TPL.

14. AUTHORITY FOR THE ISSUE OF THE PLACEMENT SHARES

15. Pursuant to Rules 812(1)(a) and 812(1)(c) of the Mainboard Rules of the Listing Manual of the SGX-ST (the "Listing Rules"), an issue must not be placed to (i) an issuer's substantial shareholders, or (ii) substantial shareholders, related companies (as defined in section 6 of the Companies Act, Chapter 50 of Singapore), associated companies and sister companies of the issuer's substantial shareholders, unless specific shareholders' approval for such a placement has been obtained.

16. As SIHL is a substantial shareholder of the Company and TPL is an indirectly wholly-owned subsidiary of SIHL, the issue and allotment of the Placement Shares will be made pursuant to a specific mandate. The Company will be seeking the approval from shareholders of the Company (the "Shareholders") for the Placement at an extraordinary general meeting (the "EGM") to be convened pursuant to Rule 812(1) and 812(2) of the Listing Rules.

17. In accordance with Rule 812(2) of the Listing Rules, S.I. Infrastructure, TPL and SIHL Treasury Limited ("SIHL Treasury") shall abstain from voting on the resolution approving the Placement and issuance of the Placement Shares.

18. CONDITIONS PRECEDENT TO THE PLACEMENT

19. Completion of the Placement is conditional upon, among others, the following:

20. the specific approval(s) from the Shareholders for the Placement, as required under the Listing Rules (including (i) Rule 812 of the Listing Rules in relation to the placement of the Placement Shares to the Company's substantial shareholders and/or related companies of the Company's substantial shareholder, and (ii) Chapter 9 of the Listing Rules in relation to the Placement as an interested person transaction), having been obtained (each on terms and conditions acceptable to the Company and the Placee, each acting reasonably) and not being revoked or amended;

21. the receipt by the Company of an approval in-principle for the listing of and quotation for the Placement Shares on the Mainboard of the SGX-ST (the "Listing Approval") having been obtained from the SGX-ST (on terms and conditions acceptable to the Company and the Placee, each acting reasonably) and not being revoked or amended;

22. the waiver from the Securities Industry Council (the "SIC") in respect of the obligation by the Placee and their concert parties to make a mandatory general offer under Rule 14 of the Singapore Code on Take-overs and Mergers (the "Code") for all the shares in the capital of the Company in issue not already owned, controlled or agreed to be acquired by the Placee and their concert parties as a result of the allotment and issuance of the Placement Shares to the Placee (and/or their concert parties, if any) (the "Whitewash Waiver") having been obtained (on terms and conditions acceptable to the Company and the Placee, each acting reasonably) and not being revoked or amended;

23. the approval of a whitewash resolution from independent Shareholders for the waiver of their rights to receive such a mandatory general offer from the Placee and/or their concert parties pursuant to Rule 14 of the Code;

24. any conditions attached to the Listing Approval or the Whitewash Waiver which is required to be fulfilled on or before the completion date, having been fulfilled on or before that date to the satisfaction of the SGX-ST or the SIC (as the case may be) unless waived by the SGX-ST or the SIC (as the case may be);

25. the Placee obtaining the necessary corporate approval(s) and approval(s) from all applicable governmental authorities and/or the Stock Exchange of Hong Kong or such other recognised stock exchanges or share exchanges (the "Recognised Stock Exchange") to subscribe for the Placement Shares at the Placement Consideration in accordance with the terms of the Placement Agreement;

26. the Company or the Placee not in breach of any of the undertakings and covenants given in the Placement Agreement as at the completion date, and if any of such undertakings and covenants are required to be fulfilled on or before the completion date, such undertakings and covenants shall have been fulfilled prior to completion date; and

27. the Placement not being prohibited by any statute, order, rule, regulation or directive promulgated or issued after the date of the Placement Agreement by any legislative, executive or regulatory body or authority of Singapore or elsewhere which is applicable to the Company or the Placee (including but not limited to the SGX-ST, the SIC, the competent governmental authorities in Hong Kong, and the Recognised Stock Exchange),

(collectively, the "Conditions Precedent" and each a "Condition Precedent").

28. In respect of the Condition Precedent set out in paragraph 5.1(b) above, the Company will be submitting an additional listing application to the SGX-ST. The Company will make the necessary announcement once the Listing Approval has been obtained from the SGX-ST.

29. If the Conditions Precedent are not satisfied on or before the date falling 90 calendar days after the date of the Placement Agreement or such other date as SIHL and the Company may agree, the Company and SIHL shall be released and discharged from their respective obligations under th Placement Agreement, save for any rights and liabilities accrued on or prior to such termination.

30. Pursuant to the Placement Agreement, the completion date of the Placement shall be the date falling no later than five (5) Business Days after the date of the last of the conditions precedent in the Placement Agreement are satisfied, or such other date as the Company and SIHL may agree in writing.

31. RATIONALE FOR THE PLACEMENT

32. The Company intends to use the Net Proceeds (as defined below) from the Placement to: (i) finance the business expansion of the Company and its subsidiaries (collectively, the "Group");

    (ii) repay existing borrowings and improve its gearing ratio; (iii) improve its cash flow; (iv) increase working capital; and (v) for general corporate purposes.

    The Company intends to further explore ways and/or adopt measures with the objective of boosting its issued share capital and increasing its value.

33. The directors of the Company (the "Directors") are of the opinion that after taking into consideration the present bank facilities, the working capital available to the Group is sufficient to meet its present requirements.

34. The Directors are further of the opinion that after taking into consideration the present bank facilities and Net Proceeds of the Placement, the working capital available to the Group is sufficient to meet its present requirements.

35. USE OF PROCEEDS

36. When allotted and issued in full, the estimated net proceeds from the Placement after deducting expenses of approximately S$500,000 incurred in connection with the Placement is expected to amount to approximately S$220,000,000 (the "Net Proceeds").

37. The Company intends to use the Net Proceeds from the Placement as follows:

38. approximately S$132,000,000 or 60% of the Net Proceeds to repay existing borrowings and improve its gearing ratio; and

39. approximately S$88,000,000 or 40% of the Net Proceeds for general corporate purposes (including to finance the business expansion of the Group and for working capital).

40. The Company will make periodic announcements as to the use of the Net Proceeds from the Placement as and when such Net Proceeds from the Placement are materially disbursed and whether such use is in accordance with the stated use. Where there is any material deviation from the stated use of the Net Proceeds, the Company will announce the reason(s) for such deviation.

41. Pending the deployment of the Net Proceeds from the Placement, such Net Proceeds may be placed as short term deposits with financial institutions and/or invested in short term money markets or debt instruments or for any other purposes on a short term basis as the Directors may in their absolute discretion deem fit, from time to time.

42. FINANCIAL EFFECTS

43. As at the date of this announcement, the issued and paid up capital of the Company is S$917,132,691.62 divided into 2,256,588,726 Shares (excluding treasury shares). When allotted and issued in full, the Placement will increase the existing issued and paid-up share capital of the Company by S$220,500,000 to S$1,137,632,691.62, divided into 2,606,588,726 Shares (excluding treasury shares).