Hyflux

Failure is part and parcel of life and naturally so as part of capital market.

It is a question of fraud, misselling and maybe misrepresentation. Doesn’t mean investor will has recourse when the company is fraudulent. Who to pay investor back when money is gone?

It is a buyer beware world. Those who are not able to handle it don’t invest

(19-01-2019, 06:18 PM)ACTIVIST SPEAKS Wrote: Salim will only put in money after all MTN, PCS and CPS are cleaned off from the balance sheet thru a conversion into equity.  If Hyflux's business is viable, wouldn't it be better to just work on the conversion ratio of these instruments and forget about Salim?  

Conversely, if Hyflux must have Salim's money to survive even after all MTN, PCS and CPS are converted to equity, then the entire operation was never capable of working successfully....ever

Even all the debts are converted into equity, Hyflux will still not be a going concern. It is in urgent need for working capital.

(19-01-2019, 11:10 AM)karlmarx Wrote: It looks like the situation is looking clearer, albeit not in a good way. The PCS and CPS holders were threatened that they will get back nothing if they do not support the restructuring deal with SM Investments. The purpose of the townhall meetings seem to be to continuously lower expectation of the PCS and CPS holders -- who are the largest and lowest-ranked creditors -- to ensure that they eventually support the restructuring deal.

https://www.businesstimes.com.sg/compani...iquidation

Bank creditors: Safe
Medium Term Notes: SM said no extension of maturity. Most likely conversion to equity.
Perpetual Capital Securities: Most likely conversion to equity.
Cumulative Preference Shares: Most likely conversion to equity.

Since it has become quite clear that the MTN, PCS and CPS will be converted to equity, what is the conversion ratio like?

SM Investments' $400m deal for 60% of Hyflux values the company at $666m. Which means the remaining 40% of shareholders will get shares valued at $266m.

The total value of MTN, CPS and PCS are about $1,165m. How to fit $1,165m into $266m? We have not even included equity shareholders, who are likely only to be given a tiny token stake, if at all.

Obviously, the value of the MTN, CPS and PCS will have to be whittled down to about a fifth of its value. The more senior ranking debt will obviously get more. One can make their own guesses at how much each instrument will be cut. I don't think the CPS and PCS holders will get back more than 15% of their capital, and it will be in shares, which will be subject to selling pressures upon completion of SM restructuring, and resumption of trading.

Not quite correct.

Unsecured bank creditors  are ranked same as MTNs..so need to increase that 1.165 billion to share 266

Now I understand why some CPS/Perps holders would rather liquidate than to support the restructuring....Why should one support the restructuring if by doing so, one ends up with almost nothing?

Salim's participation appears to be the bitter pill the CPS/Perps holders find hard to swallow. With even the unsecured bank creditors converted to equity, surely Hyflux can continue operating without Salim's cash.

If Hyflux could continue without cash injection from Salim or whoever the "strategic investors",
it would not have asked for emergency loan. Truth is it is short of fund to continue operating.

(25-01-2019, 08:47 AM)ACTIVIST SPEAKS Wrote: Now I understand why some CPS/Perps holders would rather liquidate than to support the restructuring....Why should one support the restructuring if by doing so, one ends up with almost nothing?

Salim's participation appears to be the bitter pill the CPS/Perps holders find hard to swallow.  With even the unsecured bank creditors converted to equity, surely Hyflux can continue operating without Salim's cash.

The bitter pill is:

1)Why were 6 bidders rejected by PUB who allowed only 2 local companies to bid. Sembcorp and Keppel. Sembcorp bidded below Maybank loan which is approx 500 mil. Keppel abstained.

But Salim  is allowed by PUBPto bid 400 million for controlling stake at the group level which includes Tuaspring , Singspring , Tuasone, e.tc?

I don't see any rationale but the effect is, the hampering of the bidding process would surely have resulted in a lower return to the investors . I am of the view that the Sembcorp deal is better than the Salim deal.

2) it was stated there was no default or a legal demand for payment , yet Hyflux entered into a voluntary court protection . To me, this was ill timed. CFO stated that before the court protection , the price talked about for Tuaspring was still around book value in Feb /march ( 1.3 billion ) . Court protection was seeked in may. September/Oct, it was then revealed that Sembcorp bidded and it was around  below 500 million. It is reasonable to think that the voluntary court protection resulted in this up to 800 million of value lost .
Why not wait till a legal demand of payment , fight in court, lost , then apply for court protection , at least there is more time to sell Tuaspring ...besides, entering court protection could have triggered more defaults and legal payments ....

3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification.

4) it is very ridiculous when u look at the power market and why there is a glut in electricity and also why we are are seemingly enjoying low electricity prices up to 30% off ( or rather,whywe have been paying high electricity prices previously). This is a long story ....but is interesting to know.

Anyway, I have lost faith in our market, lost faith in SIAS.

When a company is allowed to conduct a Townhall under a without prejudice setting ( and it seems it quite common), irresponsible statements without accountability can be thrown about ..a complete waste of time

(25-01-2019, 03:27 PM)sgdividends Wrote:

(25-01-2019, 08:47 AM)ACTIVIST SPEAKS Wrote: Now I understand why some CPS/Perps holders would rather liquidate than to support the restructuring....Why should one support the restructuring if by doing so, one ends up with almost nothing?

Salim's participation appears to be the bitter pill the CPS/Perps holders find hard to swallow.  With even the unsecured bank creditors converted to equity, surely Hyflux can continue operating without Salim's cash.

The bitter pill is:

1)Why were 6 bidders rejected by PUB who allowed only 2 local companies to bid. Sembcorp and Keppel. Sembcorp bidded below Maybank loan which is approx 500 mil. Keppel abstained.

But Salim  is allowed by PUBPto bid 400 million for controlling stake at the group level which includes Tuaspring , Singspring , Tuasone, e.tc?

I don't see any rationale but the effect is, the hampering of the bidding process would surely have resulted in a lower return to the investors . I am of the view that the Sembcorp deal is better than the Salim deal.

2) it was stated there was no default or a legal demand for payment , yet Hyflux entered into a voluntary court protection . To me, this was ill timed. CFO stated that before the court protection , the price talked about for Tuaspring was still around book value in Feb /march ( 1.3 billion ) . Court protection was seeked in may. September/Oct, it was then revealed that Sembcorp bidded and it was around  below 500 million. It is reasonable to think that the voluntary court protection resulted in this up to 800 million of value lost .
Why not wait till a legal demand of payment , fight in court, lost , then apply for court protection , at least there is more time to sell Tuaspring ...besides, entering court protection could have triggered more defaults and legal payments ....

3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification.

4) it is very ridiculous when u look at the power market and why there is a glut in electricity and also why we are are seemingly enjoying low electricity prices up to 30% off ( or rather,whywe have been paying high electricity prices previously). This is a long story ....but is interesting to know.

Anyway, I have lost faith in our market, lost faith in SIAS.

When a company is allowed to conduct a Townhall under a without prejudice setting ( and it seems it quite common), irresponsible statements without accountability can be thrown about ..a complete waste of time

 
Regulated assets are subject to approval of regulator who doesn't need to explain why this or that .

"Regulated assets are subject to approval of regulator who doesn't need to explain why this or that ."
> yeah sucks to think how much SP has creamed off SG residents over the last ten years and beyond

"3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification."
> sorry i may have missed things, but what's this 8M projection?

(25-01-2019, 05:54 PM)BRT Wrote: "Regulated assets are subject to approval of regulator who doesn't need to explain why this or that ."
> yeah sucks to think how much SP has creamed off SG residents over the last ten years and beyond

"3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification."
> sorry i may have missed things, but what's this 8M projection?

I vividly remember our Gov only mentioned 7M, later the 6.9M in white paper . Maybe I miss the revised 8M figure ?

(25-01-2019, 05:54 PM)BRT Wrote: "Regulated assets are subject to approval of regulator who doesn't need to explain why this or that ."
> yeah sucks to think how much SP has creamed off SG residents over the last ten years and beyond

"3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification."
> sorry i may have missed things, but what's this 8M projection?

Apparently it wasn't SP that was creaming ...

It was the LNG vesting scheme by EMA which the Gencos thought was a form of subsidy by fixing a price for a specified quantity that the Gencos can sell their electricity for. So they all rushed to built power plants that using LNG to run on. This resulted in the oversupply and expensive electricity previously.

Read http://singaporepowerdesk.com/vesting-co...st-4-years

And YET olivia Lum and BOD was so daring to enter a new business without such a "subsidy", by betting solely on USEP price, while others went with the "subsidy".

EMA reduced the number of vesting quantities later which the other gencos were not happy about . EMA clarified that it was not meant as a subsidy .

YTL power seraya said:" if generators had understood that this was the case ,they would have been more reluctant to support the LNG terminal"

About the 8 million population, it was from Olivia lums own words during the Townhall.....still seeking clarification from Hyflux... perhaps, it was why she went in without the "subsidy" under the LNG vesting scheme which the Gencos thought was a "subsidy" but EMA said it wasn't