Dayen chairman in forced sale of 16.2m shares

Disposal initiated by finance institution slashes his stake to 10.4% from 18.4%
By JAMIE LEE

DAYEN Environmental's executive chairman John Lee had to sell 16.2 million shares in the past few days, regulatory filings showed yesterday.

Amid a huge sell-off this week that has wiped out almost half of Dayen's market value after its diversification into the energy sector, substantial shareholder and Singapore Airlines chairman Stephen Lee Ching Yen also decided to sell a 4.88 per cent stake in the open market, separate SGX filings showed.

John Lee sold 4.5 million shares at 16 cents apiece on July 2 and another 11.7 million shares at 13 cents the next day as part of 'sales initiated by financial institution to meet obligation', SGX filings note. No financial institution was named, though sources told BT that Kim Eng Securities could be involved in the forced sell.

Following the two transactions, John Lee's stake in Dayen has been slashed to 10.4 per cent from 18.4 per cent.

From June 9-11, he sold 2.86 million shares to meet margin calls in four separate transactions. These were mostly married deals at 40 cents apiece, which was above the market price then. The sale was a personal matter and had nothing to do with the business, he told BT at that time.
John Lee did not return calls when contacted by BT.

Separately, substantial shareholder Stephen Lee pared his stake in Dayen to 3.78 per cent from 8.66 per cent on July 3, an SGX filing shows. This was done in the open market and 'at own discretion', according to the filing.

One investor told BT that Dayen should focus on its water treatment business, citing opportunities in China.

'Dayen is a water treatment company. It should focus on this. The technology they have is quite good,' said the investor, who declined to be named.

'There aren't that many players in Singapore, and the China market is quite lucrative. Water treatment is going to become very important in China. Dayen just has to go step by step.'

Dealers said that investors have lost faith in Dayen after the company said that its Indonesian partner was 'unable to perform its obligations' under a mining rights agreement signed in December last year. Dayen entered into an agreement with Indonesia's PT Modal Investasi Mineral for rights to mine up to five million tonnes of coal in Kalimantan over seven years for a fixed royalty payment of US$5 a tonne. The coal was supposed to translate to revenue of US$250 million based on then prevailing market price.

The company agreed in April this year to sell the rights to China (Fujian) Foreign Trade Centre Holdings for US$25 million by way of six payments starting on Sept 30 this year to Dec 15, 2013.

Dayen's stock fell as much as 10.7 per cent to 12.5 cents yesterday, with 21.7 million shares changing hands. Its share price closed flat at 14 cents.