Shares in United Envirotech Ltd jumped as much as
14.6 percent to their highest in eight years, after U.S. buyout
firm KKR & Co LP agreed to make a $40 million follow-on
investment in the China-focused water treatment and recycling
By 0154 GMT, United Envirotech shares were up 9.7 percent at
S$0.565, with 10.7 million shares traded, 2.5 times their
average daily volume over the last five sessions.
KKR said on Tuesday it will buy shares in United Envirotech
at S$0.50 per share, which represents an 8.5 percent premium to
the volume weighted average price for the last 30 trading days.
"With such a big and well-known fund investing in United
Envirotech, it gives a sign of confidence to investors," said a
local trader, adding that the company will be able to use the
funds to invest in new earnings accretive water projects.
In 2011 KKR, which manages about $66 billion globally,
invested $113.8 million in United Envirotech through convertible
However, the trader noted that the potential dilution
resulting from a conversion of the bonds could limit further
upside in United Envirotech's share price.
0956 (0156 GMT)
(Reporting by Charmian Kok in Singapore; Editing by Jijo
9:11 STOCKS NEWS SINGAPORE-UBS downgrades Olam to 'sell'
UBS downgraded Olam International Ltd to 'sell'
from 'buy' and cut its target price to S$1.33 from S$2.95,
citing uncertainties around the cost of its Gabon project.
Olam shares were down 0.3 percent at S$1.60 by 0100 GMT,
around 8 percent below the level they were at before
short-seller Muddy Waters launched an attack on the commodities
trading company for its accounting practices and aggressive
UBS said the World Bank now estimates the total cost of the
Gabon project to be at $1.5 billion to $2 billion, compared with
Olam's initial estimate of S$1.3 billion.
"A cost overrun and project delays significantly increase
the risk to management's target of turning free cash flow
positive by 2015," said UBS in a note.
The brokerage also said its bankruptcy analysis of Olam
shows the company's financial position has deteriorated to below
financial health levels, but remains above distress levels.
"A number of concerns have arisen in recent months," said
UBS, including Olam's earnings quality and growth, deteriorating
returns on asset investment, the risk of Nigerian export credit
write-downs, management compensation, the recent share buyback
considering its capacity expenditure requirements and negative
free cash flow.
0901 (0101 GMT)