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

JustLikeThis

Alfrescian
Loyal
This is the latest statement from Indonesians
The Indonesian group said it was "surprised by the action taken by Hyflux," citing its "purported termination" of the deal.
https://asia.nikkei.com/Business/Bu...llapses-after-spat-with-Indonesian-consortium


So here's what happened. proxy votes collected by Boardroom are mostly NO-votes, especially the notesholders and major PnPs investors. According to my sources, I can confirm that these NO-votes include Top-20 Preference Shareholders in the last Annual Report. Logically those who bother to turn up on April 5 voting will likely be NO-votes. This is a crashing defeat for Hyflux's management and regulators.

What are the implications for a NO-votes victory?
Indonesians can get their escrow $38.9m back. This is why SMI will want to proceed with the voting, they never said they will not proceed with the deal. The legal way for them to get their money back is to be rejected on April 5th. Most importantly No-votes victory means that Hyflux will be forced open her books and the Management and Auditors' wrongdoing will be exposed.

Hyflux lied numerous times. As recent as 2-3 weeks' ago, they cancelled the last townhall citing overwhelming RSVPs, when the confirmed attendees was the lower than Townhall 1 & 2 (up to the last weekend before Townhall 3).

Therefore, in the best interests of the Hyflux's management, they are canceling, so that they can continue to helm the company. These people are not stupid. Just a few days ago, Hyflux's director Simon Tay hurled insults at investors, calling them "noises". Such sheer arrogance. It shows the kind of attitude that Hyflux's management has.




Simon Tay might be shitting in his pants after knowing the NO proxy votes. The restructuring contains written clauses that cede all rights to pursue their wrongdoings in the past. The restructuring is not about helping us, it is about getting signatures to grant them immunity, in exchange for a token compensation for retail investors.
 

JustLikeThis

Alfrescian
Loyal
(Bloomberg): Securities Investors Association (Singapore)’s CEO David Gerald says he called Hyflux CEO Olivia Lum to determine whether there is an alternative solution that can be presented to investors and creditors after its restructuring pact with SM Investments was scrapped, according to press statement on Thursday.

Lum told Gerald that Hyflux board will quickly re-engage with previous interested parties who had shown keen interest and were bidding for Hyflux with SM. Lum said board needs time to negotiate with interested parties and asked they be given time and space to work on an alternative proposal to avoid liquidation.

SIAS asks senior creditors to give co. chance to provide alternative proposal, not put co. under liquidation hastily, in which case retail investors who are bondholders will lose everything.

SIAS asks all stakeholders to allow Hyflux time and space to work out alternate solution, support board to provide solution.
 

Maybe

Alfrescian
Loyal
This week, Olivia should consider go beg Prime Minister for help, on behalf of the investors.

For her past glories, she should be qualified to be granted an audience with the Prime Minister.


 
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Maybe

Alfrescian
Loyal
Hyflux is alike a gambler who peeked at the cards, then asked dealer for a reshuffle or new set.
Look at the timing of the cancellation. Basically, the EY Chairman and Olivia knew the proxy results, so she aborted the rescue plan.

MTN legal was right in their analysis, so we won without a fight by staying united with NO-vote. I bet Olivia will come out with a new scheme which will lump MTN with retail investors next round, given her wit and lack of integrity.
 

Froggy

Alfrescian (InfP) + Mod
Moderator
Generous Asset
https://asia.nikkei.com/Business/Co...ource=NAR Newsletter&utm_content=article link

Toxic Hyflux on the brink as Singapore mulls asset seizure
Water treatment company has less than 30 days to avoid liquidation
KENTARO IWAMOTO, Nikkei staff writer April 05, 2019 16:41 JST

1554481102886.png


SINGAPORE -- Pressure is mounting on the Singapore government to seize a troubled desalination plant owned by debt-laden Hyflux after a bailout deal with an Indonesian consortium led by Salim Group collapsed Thursday.

That would enable Hyflux "to reach out to a wider pool of investors which may not otherwise have been interested in an investment in the group had this asset remained within the group,'' the company's board said in a statement.

With the government stating that it will not rescue stock and bondholders, and Hyflux facing liquidation unless a savior emerges by the end of this month, retail investors now face the prospect of losing their entire investment.


It's a far cry from 2011, when the cachet enjoyed by Hyflux was such that retail investors were allowed to dip into their retirement savings to buy the water treatment company's preference shares.

"The immediate issue is the controversy over how retail investors who placed their trust in what they thought was an icon of Singapore are furious, and their anger has been public and so has affected many other Singaporeans," Manu Bhaskaran, chief executive officer of independent research and advisory firm Centennial Asia Advisors, told Nikkei Asian Review. "It also raises questions over whether there is adequate protection of retail investors in Singapore."

Nearly a year since the 30-year-old water treatment company filed for court protection, Hyflux is saddled with SG$2.7 billion ($2 billion) worth of debt and a portfolio of stricken assets that not even the most sanguine of white knight investors appears to want.

Wrapped up in the rise and fall of Hyflux is not just the $900 million injected by the 34,000 retail investors who believed in the company, but an issue even more critical to the tiny city-state of 5.6 million people: water.

"Water security is integral to Singapore's national security," Masagos Zulkifli, Minister for Environment and Water Resources, told Parliament this week.

It's so ingrained in the Singapore psyche that many preschoolers are taught a "shower dance" instructing them how to get in and out of the shower inside five minutes and save water.

Founded in 1989 by entrepreneur Olivia Lum, still the company's chief executive officer and it's largest shareholder, Hyflux's water treatment and desalination technologies came to be seen as a symbol of Singaporean self-reliance that benefited the entire country.

Of Singapore's four national "taps" -- desalination, recycling, water imports and its own reservoirs -- Hyflux played a key role in the first two. Growing steadily over the years selling water to Singapore's water authority, the company's profits kept rising, reaching a peak of SG$88 million in 2010.

The turning point for Hyflux came in 2011, when the company won a government tender to develop the country's biggest desalination plant, Tuaspring. It was a fateful decision, and sowed the seeds of Hyflux's undoing.

Promising to supply water at a significant discount to rival bidders, Hyflux believed that by building a power plant in tandem with the desalination plant, it could use the profits from selling electricity to subsidize the cost of producing water.

So confident were Hyflux executives that they locked the company into an agreement with the Singapore government to supply water for SG$0.45 per cubic meter, much lower its rival bidders were offering to supply water for SG$0.67 and SG$1.42 per cubic meter respectively.

The only problem for Hyflux was that electricity prices collapsed, and in 2017 Hyflux booked its first net loss of SG$116 million. During the nine months through to September 2018, Hyflux's losses reached SG$1.049 billion, mainly due to a SG$916 million of impairment loss mostly on the Tuaspring plant.

"Overall, the plant is a toxic asset,'' Leong Ching, Co-Director of the Institute of Water Policy and Assistant Professor at Lee Kuan Yew School of Public Policies, told Nikkei.

"The plant is already operationally in trouble. Add to that the age of the plant and the fact that membranes need to be replaced, we can see for sure this is something that requires an injection of funds," she said, adding that whoever took over the plant would not only have to spend millions to restore it to operational order but would then be required to sell the water at a rock bottom price.

1554481202125.png


Heightening the saga around Hyflux is the fact that retail water prices have risen sharply, increasing from SG$2.10 per cubic meter to SG$2.74 over the two years through 2018. Singaporeans now pay almost twice as much for water as people in Hong Kong and Seoul.

With the government led by Prime Minister Lee Hsien Loong explaining that the price revision was "needed to meet the higher costs of treating and supplying water,'' water prices could rise even further if Malaysian Prime Minister Mahathir Mohamad follows through on this threat to charge more for the water that Malaysia pipes directly into Singapore.

Still, even if Hyflux ends up being liquidated, the long-term impact on consumers and businesses is expected to be limited.

"In terms of inter-linkage with other businesses, I don't believe the impact is big," said Ezien Hoo, a credit research analyst at Singapore's Oversea-Chinese Banking Corp. "In terms of effects to the market, potentially there could be a regulatory reaction to check some of the processes for the selling of retail bonds given the confusion and impact among retail investors."

For Manu Bhaskaran of Centennial Asia Advisors, perhaps the saddest issue to arise from the saga is the flame-out of a rare Singapore success story.

''It's not so much a case of national pride being dented, Singapore is still a success story in so many ways,'' said Bhaskaran. "More a case of why we have not produced sterling good companies like other countries do.''
 

JustLikeThis

Alfrescian
Loyal
Why our country's leadership just trying cover the mess created by NEA and natural gas contracts and accounting frauds, nobody dare to admit the underlying problem and help your own citizens? What kind of country is this?
 
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Soul

Alfrescian
Loyal
A public–private partnership model (PPP) has been around in Singapore. We saw how the government privatized SMRT mitigate the impacts and $1.1bn for new buses in Singapore https://www.todayonline.com/singapo...nt-programme-completed-1000th-bus-added-fleet
https://www.todayonline.com/busines...llow-smrt-sharpen-focus-rail-service-analysts

I hope that considering the underlying issues in NEA, Hyflux and largest number of retail investors affected in our local corporate history, the Singapore government will extend support to Hyflux like what they did for SMRT and bus companies.
 
We're leaving together,
But still it's farewell
And maybe we'll come back
To earth, who can tell?
I guess there is no one to blame
We're leaving ground (leaving ground)
Will things ever be the same again?
It's the final countdown

The final countdown !
 
Singapore vexed by water dilemma as Malaysia seeks price hike
Leaders fail to bridge gap while Hyflux drowns in debt

TAKASHI NAKANO, Nikkei staff writer
https://asia.nikkei.com/Politics/In...by-water-dilemma-as-Malaysia-seeks-price-hike

SINGAPORE -- Singapore is stuck in a dilemma over its water supply as neighbor Malaysia demands higher prices while local water treatment company Hyflux faces liquidation.

For Singapore, water security is an important national security issue. The island has improved its self-sufficiency with water treatment technologies but is still dependent on imports from Malaysia.

Singapore's desalination efforts have also been a process of trial and error. Desalination facility operator Hyflux is facing liquidation with a court-ordered moratorium on its debt ending April 30. With the replacement of water quality equipment frozen, the government is planning to seize a desalination plant owned by the company later this month.
 
This Singaporean Tale of Corporate Ruin Has 34,000 Victims
Mom-and-pops plonked almost US$670 million into a water and power company. Be they gullible or greedy, they’re now left empty-handed.


If success has many fathers, failure in financial markets is no orphan either: It almost always ends up in the lap of retail investors. In Hyflux Ltd., there are 34,000 of these moms and pops, set to lose most - if not all - of the S$900 million ($665.5 million) they plonked down in the troubled Singaporean water and power firm’s preference and perpetual shares.

That Sinking Feeling
The collapse of Singapore-based water treatment company Hyflux Ltd. has affected some 34,000 retail investors

This is the way capitalism works, the aggrieved investors are being reminded. Their demand that the Singapore government should step in has been a nonstarter, even after some of them even organized a rare protest at the city’s Speaker’s Corner to try to squeeze out a better deal.

Investors are only human, so they need to blame someone or something — such as the ATM for letting them buy Hyflux’s junior debt with a couple of easy clicks. But there aren’t many voices of sympathy. Stefanie Yuen Thio, a prominent city lawyer cited by the Business Times, says the real problem is that while “Singapore's securities market has grown in sophistication and complexity, the Singapore retail investor has not kept up.”

Naivete, though, is only a part of the story. The fact that the securities are unrated gets a lonely mention at the end of page 19 in the 2016 offer document. By contrast, the information that the perpetuals can be ordered on an ATM, and via web and mobile, adorns the front page. The low-rate environment, too, made mistakes inevitable. The 2016 Hyflux perps promised a 6 percent coupon, when 30-year Singapore government bonds yielded 2.5 percent. It promised a step-up in 2020 in case the four-year Singapore dollar swap offer rate rose as global interest rates normalized. How many retail investors even know what that benchmark is?

Hyflux Ltd. offer document from May 2016 for 6 percent perpetual securities - Bloomberg

"Due to very low rates and yields in the past five years, Singapore investors, both institutional and retail, have sometimes opted for riskier bonds to increase cash returns,” says S&P Global Ratings analyst Bertrand Jabouley. In an ageing society like Singapore, it’s not uncommon for retail investors to have targets for cash returns.

The Monetary Authority of Singapore told Bloomberg News that it hasn’t uncovered any impropriety by DBS Group Holdings Ltd., the city’s biggest bank that arranged the sale of its securities in May 2016. “All investments carry risks,” the MAS said.

They sure do, and risk factors mention them. “The Group is a new entrant to the power business,” says page 35 of the Hyflux offer document. But is that a fair warning for a S$916 million asset impairment in the first nine months of 2018?

Hyflux was a homegrown success. Temasek Holdings Pte., the state investment firm, had a stake in it in the early 2000s. “Local companies with strong capabilities are building, expanding, gaining a march on their competitors, like Hyflux,” Singapore Prime Minister Lee Hsien Loong said in his national day rally speech in 2009. In 2011, CEO Olivia Lum became the first woman to win the Ernst & Young World Entrepreneur of the Year award. She did business in Algeria, Saudi Arabia, Egypt and Oman.

Nobody is denying those successes. But Hyflux shouldn’t have been allowed anywhere near yield-starved Singapore retail investors in 2016. S&P says that “numbers at that time already suggested that the company's capital structure was hardly sustainable, with a ratio of net debt to Ebitda above 10x in 2015 and negative Ebitda in 2014, driven by performance issues at the company's Tuaspring desalination and power plant.”

The loss may be investors’ to nurse, but neither their gullibility nor greed is entirely to blame for it.
 
Mom-and-pops plonked almost US$670 million into a water and power company. Be they gullible or greedy, they’re now left empty-handed.
“All investments carry risks,” the MAS said.
Fat cats making motherhood statements. These fat cats just don't want to work.

Investors are just reporting to the "traffic police because there are illegal modification of vehicles which have caused massive accidents", and the traffic police can still claim things like crossing the road sure got risks? (All investments carry risk)
 

mojito

Alfrescian
Loyal
Fat cats making motherhood statements. These fat cats just don't want to work.

Investors are just reporting to the "traffic police because there are illegal modification of vehicles which have caused massive accidents", and the traffic police can still claim things like crossing the road sure got risks? (All investments carry risk)
Not just any fat cat sir. Even Nippon reporters also say you all greedy or gullible. So old loh cannot be so irresponsible. You all need to elucate yourselves before putting money into strangers' hands, otherwise even the PAP can't save you. :unsure:
 
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