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Hyflux & Noble Group's Decline - Regulators Refusing to Act

JustLikeThis

Alfrescian
Loyal
#1
Extracts from the article:
Why Singapore needs to learn from Noble’s failure
https://www.ft.com/content/12da7ca3-808e-355c-9a8b-2793311288a3

It is not clear that the key regulators in the Noble case have really learned any lessons from their own failures of oversight. SGX RegCo, the regulatory arm of Singapore’s stock exchange, and its overseers at the Monetary Authority of Singapore were given detailed information on Noble’s flawed accounting and excessive management compensation.

Arnaud Vagner, a former Noble employee, repeatedly approached both SGX and MAS officials to tell them about the group’s dubious asset valuations. They were not interested. Mr Vagner was not well known in Singapore, but he did make the acquaintance of Michael Dee, a former director of Temasek, Singapore’s sovereign wealth fund, who had some standing in the community.

In turn, Mr Dee connected Mr Vagner with officials at SGX RegCo and MAS. Both men urged the Singaporean authorities to engage an independent forensic accounting firm, not chosen by Noble, to directly determine whether the charges of flawed accounting were true. Mr Dee’s warnings were ignored, and the regulators sneered at Mr Vagner. As Mr Dee now says, “The whole response from the regulatory structure was to attack the messenger rather than dealing with the message.”
 

JustLikeThis

Alfrescian
Loyal
#3
Extracts from the article:
DBS has served S’poreans well?
https://leongszehian.com/?p=18841

“According to a Business Times report today, the Singdollar bond market is grappling with an unprecedented number of insolvencies.

Among the 13 defaulters, 10 continue to remain stuck in various stages of restructuring while two have been liquidated. Interestingly, from the data compiled by BT, it shows that DBS is the leading bookrunner or underwriter of 11 out of the 13 bond defaulters, including 1 which was liquidated.



With regard to “In some cases like Hyflux, they even issued such risky corporate perpetuals in small denominations to the man in the street, allowing Ah Pek and Ah Ma to buy them through ATMs.

In any case, all the investors are easily “sold” by the high yields dangling in front of them especially with the low interest rate regime operating in the last number of years. But now, the credit cycle has peaked, turning some of the high-yield instruments into “junk bonds””.
 

JustLikeThis

Alfrescian
Loyal
#4
Extracts from the article:
Cash For Hyflux Water Business Runs Dry
https://www.forbes.com/sites/forbes...eds-protection-from-creditors-as-losses-mount

In 2005, Olivia Lum debuted on the list of Southeast Asia's 40 wealthiest. The founder of water-treatment firm Hyflux saw her fortune surge to $460 million in 2011, a year in which she also became the first woman to receive Ernst & Young's World Entrepreneur Award. A year later, the self-made Lum featured on Forbes Asia 's inaugural list of Asia's 50 Power Businesswomen.

Today Lum is struggling with shocked investors after Hyflux sought and won court protection in May to tackle mounting debts and reorganize its business, which now includes power generation. For 2017, the company reported its first-ever annual loss, amounting to $85 million, with further losses in the first quarter of 2018. Total liabilities, including bank debt, are $2.1 billion.

Hyflux's market cap stands at $121 million, a steep fall from the 2010 peak of $1.6 billion. The shares, which had been down 44% for the year, were suspended May 23, affecting more than 50,000 retail and institutional investors. Also halted: payments on its high-yield perpetual securities.
 

JustLikeThis

Alfrescian
Loyal
#5
In Noble Group's debt restructuring, the senior creditors who have been controlling the restructuring will receive fees of up to $102.5m, while the existing shareholders have been handed shares worth, at the moment, about $34m. Incredibly, members of the existing management will receive up to 10 per cent of the reorganised Noble Group, after having guided the company to a 99.9 per cent loss since February of 2015.

And shareholders and bondholders waived their rights to pursue the management's wrongdoings in the past.

Reference:
Noble's Giant Writedown Proves Iceberg Research Right After Two-Year Fight.
https://www.bloomberg.com/news/arti...edown-proves-iceberg-right-after-2-year-fight
 

halsey02

Alfrescian (Inf)
Asset
#6
" excessive management compensation" is what the current day government practices. How can they govern when is that what they practices? Now who is bankrupting the country, the oppositions?
 

Kuailan

Alfrescian
Loyal
#12
Any thing that TooMaSick Touch would turn from Gold to Shit, the phrase buy High sell Low

is very appropriate! And perhaps Olivia Lum might have scam HyFlux after she saw the million, bank it

overseas leaving share holders high and dry!! With mouth open waiting fo House fly to get in??
 

JustLikeThis

Alfrescian
Loyal
#15
Haircut coming for Hyflux?

http://www.theedgemarkets.com/article/maybank-expected-manage-nim-second-half-after-lcr-boost
Maybank set a provision of RM315.1 million related to Hyflux Ltd (in Singapore). Hyflux is now undergoing a balance sheet restructuring involving disposal of key assets funded (and secured) by Maybank Singapore (the Tuaspring Integrated Water and Power Project, with exposure at S$602.4 million [RM1.81 billion], and TuasOne, with exposure at S$56.2 million).

Maybank is a secured lender to Hyflux. Yet their credit assessment made a provision of ~S$105m on their S$658.6m (S$602.4m + S$56.2) exposure to Hyflux.
This equates to 16% write down.

If secured lender is projecting 16% write down, that means exponentially higher haircut for unsecured lenders, bonds, perpetual bonds and preference shares holder.
 

JustLikeThis

Alfrescian
Loyal
#18
Any thing that TooMaSick Touch would turn from Gold to Shit, the phrase buy High sell Low

is very appropriate! And perhaps Olivia Lum might have scam HyFlux after she saw the million, bank it

overseas leaving share holders high and dry!! With mouth open waiting fo House fly to get in??
She was a Malaysian. I wonder if she is a naturalized Singaporean but Malaysians are still proud of her.
https://www.thestar.com.my/business/business-news/2018/03/20/spores-hyflux-falls-from-grace
 

JustLikeThis

Alfrescian
Loyal
#20
Actually the retail investors will have some money left if Hyflux liquidates because water and power assets are highly-sought after. Because Olivia put up a struggle and refuse to cede her leadership, she is going to resort to the new DIP financing legislation which will allow her to retain her position while enjoying fresh source of financing which are ranked higher than all other debts. If this goes through, and if she continues to not do well, all current bonds, preference shares and perpetual shareholders have nothing left during liquidation. understand?

DIP financing legislation
http://www.mondaq.com/x/732782/Fina...sia+Considerations+For+Financial+Institutions
The current Hyflux restructuring, relating to a water treatment group in Singapore, has seen the debtor company reportedly engage with more than 20 potential rescue lenders with a view to utilising the new DIP financing legislation.

Super priority - The rationale is that "it is only where there is some evidence that the company cannot otherwise get financing that it would be fair and reasonable to reorder the priorities on winding up, giving the rescue financier the ability to get ahead in the queue for assets." Therefore, the applicant should prove to the court that "reasonable attempts at trying to secure financing" were made in order to seek super priority status.
 
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