The Straits Times / The Business Times News on Hyflux

Hyflux loses some shine as CEO, 2G Capital trim stakes

INVESTORS poured cold water on water treatment firm Hyflux after its high-profile chief executive, Ms Olivia Lum, and investment firm 2G Capital, pared their stakes in the firm.

The counter lost 30 cents, or 8.9 per cent, over the week, to close at $3.34 yesterday. It was among the most actively traded, with about nine million shares changing hands daily this week.

The sell-off in Hyflux shares began on Wednesday when news broke that Ms Lum and 2G Capital had sold a total of 27 million shares at $3.45 apiece.

Investment banking firm JPMorgan conducted the sale. The buyers were said to be mainly Asian and European funds.

Ms Lum, the poster girl for Singapore's entrepreneurs, sold 12 million shares, paring her holding from 36.9 per cent to 34.51 per cent. The sale was not her first. Last year, she offloaded about four million shares over a three-month period at a much lower price.

She now holds about 176.4 million Hyflux shares.

2G Capital, meanwhile, disposed of 15 million shares to reduce its stake to under 5 per cent, which means it is no longer a substantial shareholder.

The firm now has a 2.4 per cent interest in Hyflux, down from 5.34 per cent previously.

Market observers had mixed views on the sale, with some describing it as 'no big deal' as Ms Lum had sold only 2.4 per cent of her holdings in the company. They added that she was merely 'unlocking some value' in her investments.

But others expect more of such transactions as Hyflux shares come off the boil after their recent surge.

The counter has been one of the bourse's best performers this year, having risen 113 per cent.

The firm became a stock market darling after it announced a string of water treatment deals in countries such as China and the Middle East.

Since then, some research houses, such as CIMB-GK Research, have downgraded their ratings on Hyflux after it issued less-than-impressive second-quarter results last month.