Hyflux CEO Olivia Lum vows to get $1 annual salary until firm ends restructuring

Hyflux is forced to make more cost-cutting measures after the SM Investments deal fell apart.

After a whirlwind of conflicts with investors and creditors and calls for resignation, the head of the embattled water treatment firm Hyflux, Olivia Lum, has declared that she will only draw a nominal annual salary of $1 until the company is successfully restructured.

Lum also said in a court affidavit dated 23 April 2019 that the Hyflux board has agreed that no director fees will be proposed at the next annual general meeting for FY2018.

Hyflux was forced to impose more cost-cutting measures after its previous deal fell apart with would-be white knight SM Investments, thereby breaking the restructuring agreement on 4 April.

Also read: Hyflux in talks with potential white knight over $400m investment

Lum noted that the company has reduced overheads (comprising payroll, rental, and other corporate costs) on a monthly basis from $5.9m in June 2018 to $3.3m in March 2019. “Overheads are projected to be further reduced to $2.5m in June 2019,” she said.

Moreover, the number of employees has been slashed from 1,732 in March 2018 to 1,078 in March 2019 and is projected to shrink further to 980 in June 2019. Corporate headcount is expected to be reduced to 159 in June 2019.

“I am fully cognisant of the patience and indulgence that has been shown to Hyflux by the various groups of stakeholders since the grant of the moratorium orders,” Lum said.

In February, the Securities and Investors Association of Singapore (SIAS) expressed concern on why Lum did not contributed her gains to the restructuring process after noting that the CEO received over $60m in dividends from her 34% ordinary shareholding in the company in 2017, significant salary, benefits, and bonuses.

On top of internal expenses, Hyflux still has a pile of claims from creditors and investors that it has to address. Earlier, it reported that it has claims worth $47.96m in relation to the Magtaa project as well as a performance bond issued by BNP Paribas El Djazaïr (BNP Paribas). The firm also admitted $2.81b of claims after adjudication.

Photo from EY