The Straits Times / The Business Times News on Hyflux

Olivia Lum, 2G trim Hyflux stakes

HYFLUX'S founder and CEO Olivia Lum and shareholder 2G Capital have trimmed their stakes in the water-treatment company.

Lunch-break announcements yesterday show Ms Lum cut her holding on Tuesday by 12 million shares, reducing her direct stake from 32.49 per cent to 30.11 per cent or about 153.9 million shares. Ms Lum, who remains the company's largest shareholder, also has a deemed stake of 4.4 per cent.

News of the married deal came on a day when Hyflux shares suffered a retreat, falling 4.4 per cent or 16 cents to $3.46.

2G Capital, controlled by Gay Chee Cheong and Tommie Goh, has also ceased to be a substantial shareholder. It reduced its direct stake - also on Tuesday through a married deal - from 5.34 to 2.4 per cent. Besides this deemed stake of 2.4 per cent, Mr Gay also has a direct stake of 0.088 per cent.

Hyflux, which helped build Singapore's first water desalination plant, earlier this year had a one-for-two bonus share issue.

Many analysts did not wish to comment on the sales, saying that there was no significant change to the company's fundamentals.

Hyflux has been having a good run, hitting a 52-week high of $3.98 this year. At $3.46 yesterday, the firm has a market value of close to $1.8 billion.

The price started rising early last October, driven by a joint venture in the Middle East that investors saw as giving it access to lucrative water infrastructure projects there.

The stock price then subsided for a few months, but began rising steadily again in April, based on anticipated global demand for water treatment, as well as a strong order book, which included multi-million dollar projects in China. JPMorgan even upped its target price to $4.93, valuing Hyflux just above $2.5 billion.

But after peaking at $3.98 on July 27 this year, the stock cooled in August. After six consecutive quarters of negative cash-flow, many analysts reduced their earnings forecasts. For instance, as of Aug 5, Phillips Securities valued Hyflux at $2.28.

It is not the first time Ms Lum has cut her stake in the company. In April this year, she sold about 3 per cent to Dubai-based Istithmar, the investment company linked to the government of the United Arab Emirates.