Hyflux

[ACTIVIST SPEAKS]

Singapore's third desalination plant can produce up to 30m gallons a day at possibly half the energy used compared to Hyflux at a site half their size....cost $217m. Even in a government orchestrated bailout, no way OL can get her 1.3b price tag for her Tuaspring. In fact, it will be very strange if the auditor agrees to that valuation in the books especially when Tuaspring is now placed under "asset available for sale"

[AQ.]

it will be very strange if the auditor agrees to that valuation in the books especially when Tuaspring is now placed under "asset available for sale"

It doesn't matter what the auditor says - what matters is what the buyers say. Anyway forced liquidation essentially means insolvency as OL has admitted in saying that unsecured creditors get ~70% haircut in a firesale.

Let's look at the whole saga involved in flawed REIT sale-and-leaseback schemes. It's not really apple-apple in the context of "valuation" but somewhat relevant.
We have sellers, buyers, valuers, auditors, BOD, and management. Who is @ fault?

Valuers say that their job is to take a valuation model and use the rent agreed between seller and buyer. It is not their job to question whether the prices are correct - their job is to take the valuation model, ensure inputs are "within a reasonable range" (which happens to be anything under the sky) and give u the valuation output.

Sellers say that if buyers are willing to pay a high rent upfront then nothing is wrong.

Buyers (i.e. the reit) say that if they are willing to pay a high upfront rent then it is their choice. In any case the shareholders have approved share issuance mandate and IPTs.

BOD says that they are not responsible for valuation and relies on advise from valuers. 

Auditors say that they rely on management inputs and judgement.

Management say that they used their judgement and "expertise" - essentially u can blame them for being incompetent but not legally criminal.

And essentially everyone makes a bunch of fees and noone is @ fault.

So who is @ fault?

The shareholders, of course, for being naive!

[ACTIVIST SPEAKS]

@AQ, I agree with you.....This is going to be ugly for all the retail investors of all their securities.

[donmihaihai]

Shareholders will blame any of the above but themselves.

[CY09]

Hyflux hopes to attain binding bids for Tuaspring by mid-October

Maybank has given Hyflux until Oct 15 and approval by next year Feb to get through the sale of Tuaspring.

I truly doubt that the plant can be sold at a 1.3 billion book value by price tag given the tight deadline. Expectations have to be tapered down. Hyflux should be able to secure a sale that is sufficient to cover Maybank's $500 mil loan, however shareholders will be definitely wiped out in accounting terms

https://www.businesstimes.com.sg/compani...id-october

[LionFlyer]

They should just list Tuaspring on Carousell.

Seldom used water/power plant, valued at 1.3 billion, sell price 1.3 billion. Low ballers will not be entertained. But need to sell by 15 October. My lost is your gain.

[davidoh]

since our government is desperate in becoming self sufficient in water, why not government buy over

[corydorus]

since our government is desperate in becoming self sufficient in water, why not government buy over

Gov probably will if there are no private buyers to keep the operation going. But it will be at a price Hyflux shareholders will not be happy.

[money]

it will be very strange if the auditor agrees to that valuation in the books especially when Tuaspring is now placed under "asset available for sale"

It doesn't matter what the auditor says - what matters is what the buyers say. Anyway forced liquidation essentially means insolvency as OL has admitted in saying that unsecured creditors get ~70% haircut in a firesale.

Let's look at the whole saga involved in flawed REIT sale-and-leaseback schemes. It's not really apple-apple in the context of "valuation" but somewhat relevant.
We have sellers, buyers, valuers, auditors, BOD, and management. Who is @ fault?

Valuers say that their job is to take a valuation model and use the rent agreed between seller and buyer. It is not their job to question whether the prices are correct - their job is to take the valuation model, ensure inputs are "within a reasonable range" (which happens to be anything under the sky) and give u the valuation output.

Sellers say that if buyers are willing to pay a high rent upfront then nothing is wrong.

Buyers (i.e. the reit) say that if they are willing to pay a high upfront rent then it is their choice. In any case the shareholders have approved share issuance mandate and IPTs.

BOD says that they are not responsible for valuation and relies on advise from valuers. 

Auditors say that they rely on management inputs and judgement.

Management say that they used their judgement and "expertise" - essentially u can blame them for being incompetent but not legally criminal.

And essentially everyone makes a bunch of fees and noone is @ fault.

So who is @ fault?

The shareholders, of course, for being naive!

haha some words of wisdom, sums up my thoughts about pushing the blame here and there when Sh** strikes. Actually for months and years, Hyflux has negative operating cashflow yet people still remain vested in its equity shares and preference shares. Many buddies have even come to this forum to "downgrade" Hyflux, yet people argue passionately about "Water is a strategic asset and a matter of national security" so the authorities will not let it fall so now got to pray hard that some white knight will come and buy tuas spring at book value. Which company in the right mind will come buy at book value for a loss making organisation, unless that company wants to win some favour from the government ...

i am not so hopeful, if i have any meat in hyflux, i think the best thing to do is to mentally write off everything, and if you can still get a few cents back on the dollar, treat it as kopi money and smile and move on

[weijian]

As TS is a strategic asset, gov will probably come in to help. But Gov coming in to ensure it is business as usual and whether Hyflux will get a sufficient price for TS are 2 different tings.

Investors lament lack of progress on Hyflux revamp, Tuaspring sale: "To be sure, the PUB is agnostic about who operates Tuaspring and there are measures in place to keep the plant in operation no matter who owns it."

NO serious bids for Tuaspring yet and no clear restructuring plan either. This was the update investors got from Hyflux during its townhall meetings on Thursday.

https://www.businesstimes.com.sg/compani...pring-sale