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

JustLikeThis

Alfrescian
Loyal
hints by state media?
https://www.straitstimes.com/singap...hite-knight-in-talks-with-potential-investors

Sources familiar with the situation say Hyflux is in talks with potential investors, after a previous $530 million pact with Indonesian Salim-Medco Investments (SMI) fell through in early April. "Potential investors continue to express interest to invest in the company," said a source who declined to be named as he is not authorised to speak publicly on the matter.

nTan Corporate Advisory was coming onboard, in a move some industry observers saw as a renewed effort at finding a new buyer for the beleaguered company, restructuring its debt and avoiding liquidation. nTan is headed by Mr Nicky Tan, a well known dealmaker in the local corporate scene.

PUB had said earlier it would take over the water plant for zero dollars - and waive its compensations claims on the company - should Tuaspring fail to keep the plant reliably operational. But this threat to take over the water plant at zero cost has angered Hyflux's 34,000 retail investors, who are owed $900 million in total. These investors fear they may hardly see anything back by the time any repayment money trickles down to them. "The notice by PUB will basically put pressure on all stakeholders to moderate their expectations and to quickly get a deal done and to engage PUB thereafter for it to reconsider its position," said another source who is familiar with the saga.
Instead of taking over the water plant at zero cost and facing the ire of 34,000 retail investors, PUB could be persuaded to accept a new investor if the deal is viable enough. "If its concerns are addressed, there would be no reason why PUB would not reconsider its position given the number of investors and lenders - both retail and otherwise - who would be affected," the source said.

What has going for a potential deal is the sheer size of the debt and the fact that it concerns a resource of national interest, said a former financial advisor with expertise in debt restructuring.

Observers also noted that there may be political pressures to get a deal together. In this resource-challenged island state, water holds sway and its supply cannot be allowed to descend into chaos. "There are political ramifications. The pressure put on by powers-that-be to find a solution. I don't see how this will go under to the full liquidation model. It's a national issue," said the former financial advisor.

Retail investors, who are last in line when the repayments materialise, are hoping there will be a rescue deal and that the debts owed to them will not simply be written off.
Many of them are common men and women in the street, who now say they were not given enough information about these investment products they bought. One of these products was "perpetual" securities which offered them an annual return of 6 per cent "forever".

Dr Samuel Tan, assistant professor of accounting at the Singapore Management University said while it was debatable if these "perpetual securities" were too complex for the lay person to understand, Hyflux's financial reports were not easy to understand. "I can't say how complex perpetual securities are as an investment in themselves, but the complexity of Hyflux's financial statements could have made it difficult for retail investors to understand the value of its perpetual securities," Dr Tan said.
 

JustLikeThis

Alfrescian
Loyal
I am shocked by the positions taken by our policymakers to rip off our citizens, to cover their back.
Our politicians seem to forget that we are their paymaster.
 

Filloz

Alfrescian
Loyal
I shared a few months ago that in our Noble group discussions, trolls were planned from the very beginning (as investors) and supported each other to appear legitimate, investors end up self-blaming themselves, demoralizing and discouraging rebellion against the regulators, although it was the management created the fake valuations. In the end, the discussion group was like an eunuch.

Sounds familiar with Hyflux's telegram group right?
 

Revenger

Alfrescian
Loyal
DEAR MTN NOTESHOLDERS!!! That's why the management want. Exactly!!!
Our lawyers explained this situation to us a month ago. Notesholders are in the best-position, we are only about 10% of total claims and yet we determine the outcome because of our headcounts in Senior Class. Please stay united and Vote NO, everyone got to pacify us to move forward. Don't settle for 25%, GET 100%%% BACK.

ATTENTION NOTEHOLDERS!!! - PLEASE READ AND SHARE. WE HAVE HOPE.

As long as all Hyflux noteholders vote "No" , we can make bankers beg us to support because we have the numbers in Senior Class. We call the shots, according to our representative lawyer. He said we have a high chance to recover 100% if we stay united. If we say no, nothing can proceed.

As long as we stay as a team and reject, everyone will pacify us and give us back 100% + penalty interests. I am serious. Our Akin Gump lawyers had briefed those who involved. We dominate the votes in unsecured class. Bankers can continue to enjoy their banking relationship with Hyflux, but we just want our 100% back. It is really possible. Don't fall to SIAS's and Hyflux's lies and accept the haircuts.

We just need to say NO on April 5th. PLEASE PASS THE MESSAGE.

Yes! They presented the worst option to us first. Don't fall for it!

LOL, what a lousy gambler. :biggrin:
 

Empower

Alfrescian
Loyal
hints by state media?
https://www.straitstimes.com/singap...hite-knight-in-talks-with-potential-investors

Sources familiar with the situation say Hyflux is in talks with potential investors, after a previous $530 million pact with Indonesian Salim-Medco Investments (SMI) fell through in early April. "Potential investors continue to express interest to invest in the company," said a source who declined to be named as he is not authorised to speak publicly on the matter.

nTan Corporate Advisory was coming onboard, in a move some industry observers saw as a renewed effort at finding a new buyer for the beleaguered company, restructuring its debt and avoiding liquidation. nTan is headed by Mr Nicky Tan, a well known dealmaker in the local corporate scene.

PUB had said earlier it would take over the water plant for zero dollars - and waive its compensations claims on the company - should Tuaspring fail to keep the plant reliably operational. But this threat to take over the water plant at zero cost has angered Hyflux's 34,000 retail investors, who are owed $900 million in total. These investors fear they may hardly see anything back by the time any repayment money trickles down to them. "The notice by PUB will basically put pressure on all stakeholders to moderate their expectations and to quickly get a deal done and to engage PUB thereafter for it to reconsider its position," said another source who is familiar with the saga.
Instead of taking over the water plant at zero cost and facing the ire of 34,000 retail investors, PUB could be persuaded to accept a new investor if the deal is viable enough. "If its concerns are addressed, there would be no reason why PUB would not reconsider its position given the number of investors and lenders - both retail and otherwise - who would be affected," the source said.

What has going for a potential deal is the sheer size of the debt and the fact that it concerns a resource of national interest, said a former financial advisor with expertise in debt restructuring.

Observers also noted that there may be political pressures to get a deal together. In this resource-challenged island state, water holds sway and its supply cannot be allowed to descend into chaos. "There are political ramifications. The pressure put on by powers-that-be to find a solution. I don't see how this will go under to the full liquidation model. It's a national issue," said the former financial advisor.

Retail investors, who are last in line when the repayments materialise, are hoping there will be a rescue deal and that the debts owed to them will not simply be written off.
Many of them are common men and women in the street, who now say they were not given enough information about these investment products they bought. One of these products was "perpetual" securities which offered them an annual return of 6 per cent "forever".

Dr Samuel Tan, assistant professor of accounting at the Singapore Management University said while it was debatable if these "perpetual securities" were too complex for the lay person to understand, Hyflux's financial reports were not easy to understand. "I can't say how complex perpetual securities are as an investment in themselves, but the complexity of Hyflux's financial statements could have made it difficult for retail investors to understand the value of its perpetual securities," Dr Tan said.

Big brother, what is your take on this?
https://www.straitstimes.com/busine...he-table-for-hyflux-to-avoid-liquidation-sias
 

JustLikeThis

Alfrescian
Loyal

Hi @Empower, hope you been well. Here’s my 2 cents.

Similar Case Studies
1. Ezion converted almost all their secondary market bonds and perpetuals to 0.25%pa. The perpetuals are now trading at about 75% discount to par and their latest white knight Yinson (Malaysia) might request further debt reductions before helping Ezion.

2. Coincidentally, KrisEnergy also converted their former bonds to zero-rated and now trading at 75% discount to par. KrisEnergy continued to clock heavy losses and their management have exited, COO & CFO bid farewell two weeks ago.

3. Noble Group is the worst among them. After a massive haircut, their new perpetuals continued to tank and today, they are seeking money again. https://www.tradewindsnews.com/drycargo/1732988/new-noble-seeks-financing-partners

Highlight 1: No investor is better off after the above deals. What went wrong? You see, these companies are not like Olam. The restructured zero-rated or low-yield bonds are effectively worthless and just buying time for the management to draw their paychecks. Such proposals are only worth accepting if the bonds are guaranteed by respectable new investors (Eg. GLCs, Chinese/Japanese Conglomerates, or foreign sovereign funds) OR there is a change-in-control of Hyflux and the new majority investor is highly-reputable (eg. Temasek taking over Olam).

Highlight 2: Do you notice that the above-mentioned, did not convert their perpetuals to fixed-date bonds? Doing so, will make the balance sheet look bad if perpetual debts (hybrid-capital) are converted to liabilities.

Highlight 3: The Devil is in the details. When such proposals are made, think about who sacrificed along with you. In Noble, we saw investment banks bailing themselves out with funds from secondary bond issues. Are the senior creditors of Hyflux granting similar debt extension at near-zero interests and you rank pari-passu with them?

Highlight 4: With more lawsuits from overseas, bankers, MTN group, and potentially from MAS/ACRA and retail investors, three-months make no difference. What they hint today, could be easily proposed a year ago. So ask ourselves why? What’s so special 3 months later? The next General Election is probably over in 3-months. We are sure that there is going to be a huge vote-swing with the pending GST hike, resale HDB price meltdown, losses in shipping, offshore & marine counters, TCB factor, etc. Every photo of the Hong Lim Park protest captured numerous white-haired retirees or former civil servants who are staunch supporters of PAP. There will be serious repercussions from the Hyflux scandal among the electorate and offering these false hopes can limit Hyflux's impact as an election-issue.

Highlight 5: I think we will continue to see waivers of rights to pursue management and auditors for past wrongdoings. That's the whole point! In the last round, didn’t they offer us a token 3% cash-back in exchange for such waivers? Likewise they don’t even dare to face liquidation because it will open a can of worms. Still remember the Board of Director mocking us up to the very last weekend before the scheme voting?

Highlight 6: Of all people, why was SIAS given the honour to leak this announcement. Look, SIAS is a whore, trying to stay relevant. They betrayed investors earlier by preaching repeatedly the acceptance of 3% cash-back in the media. They had failed to act in good faith, so in order to stay relevant, they get to do some intangibles, eg. break this piece of news. Simple as that.



What's the Ultimate Aim?
If you are a management staff of Hyflux, getting the waiver to cover your past misdeeds is your sole concern. For that to materialize, the restructuring needs to go through (not liquidation). Assuming that the earlier hindrance to the cramp-down on retail investors was the overwhelming NO-votes by MTN holders in senior class; the upcoming proposal is drafted with the objective of satisfying the MTN holders.

In Ezion's situation, their perpetuals are trading at about 75% discount.
HOWEVER their restructured bonds (used to exchange earlier ones) due 16 months later in August 2020 are trading at a just few % below par. https://www.bondsupermart.com/main/bond-info/bond-factsheet/UV3894705


In the same manner, Hyflux is likely to offer a 2-years low-coupon extension for their MTN bondholders. With just $250+m to repay within two years will be deemed an achievable target. This time, MTN holders will likely support in strength, and the restructuring will be through. Many naive retail investors will also cast supporting votes because financial engineering convinces them believe that there is no haircut on their PnPs (although Hyflux is likely to re-default when these longer-date debts are due).



What if God made Olivia repent during the Easter Weekend?
In life, I have seen too many bad and evil living happier and longer than many honest souls. I pray that the Almighty will sink the satanists. Olivia Lum had been a consistent liar and I have cited several reasons above, why today's announcement might be part of an elaborated scam to get her ass out of jail. Once she is convicted, it is definitely easier for retail investors and bankers to file claims against the board of directors for fraudulent practices. Fraud is more serious than negligence or oversight.

City Development has a 3.9% preference share (SGX Code: C70) listed on SGX for more than a decade. There is a redemption-clause but CDL almost made it a point that they will never redeem. If CDL redeem, they will pay you a significant premium over par (hinting you that they will not redeem) which will be opposed by ordinary shareholders. Of course CDL didn't issue this because they were in distress but it was for some special tax-waiver back then.

Assuming Olivia repented during the Easter weekend, she may be proposing a totally new (Non-cummulative, this time) preference share that Hyflux will never be redeemed, like the CDL NC Preference Share. Maybe we will get 5% a year, and it will take 20 years for Hyflux to repay the principal. Of course, then we have to pray hard that Hyflux will not collapse 20 years later but again, Olivia will probably be retired by then.



CONCLUSION
The management has nothing to lose with debt-extension. Even if they re-default a few years later after debt extension, management will have escaped or resigned by then. They are just doing this is avoid getting investigated or arrested. It is so obvious that there are false-accountings and misconducts involved but one can only speculate what's holding regulators back.

For retail investors, we are likely to be bombarded by new-found optimism in the media in the days ahead, so that Hyflux does not become an election issue. We need to pass the message around. Therefore I wish to emphasize that this is likely to be another con job if the debt extension does not come with fixed redemption date guaranteed by a reputable new stakeholder.

Of course, Olivia Lum is smart. But we still have our common sense.
 
Last edited:

Filloz

Alfrescian
Loyal
In Ezion's situation, their perpetuals are trading at about 75% discount.
HOWEVER their restructured bonds (used to exchange earlier ones) due 16 months later in August 2020 are trading at a just few % below par. https://www.bondsupermart.com/main/bond-info/bond-factsheet/UV3894705


In the same manner, Hyflux is likely to offer a 2-years low-coupon extension for their MTN bondholders. With just $250+m to repay within two years will be deemed an achievable target. This time, MTN holders will likely support in strength, and the restructuring will be through.

Good points - United MTN Holders will call the shots!
BONDHOLDERS TAKE NOTE! Our perseverance is paying off.
 

Empower

Alfrescian
Loyal
Hi @Empower, hope you been well. Here’s my 2 cents.

Similar Case Studies
1. Ezion converted almost all their secondary market bonds and perpetuals to 0.25%pa. The perpetuals are now trading at about 75% discount to par and their latest white knight Yinson (Malaysia) might request further debt reductions before helping Ezion.

2. Coincidentally, KrisEnergy also converted their former bonds to zero-rated and now trading at 75% discount to par. KrisEnergy continued to clock heavy losses and their management have exited, COO & CFO bid farewell two weeks ago.

3. Noble Group is the worst among them. After a massive haircut, their new perpetuals continued to tank and today, they are seeking money again. https://www.tradewindsnews.com/drycargo/1732988/new-noble-seeks-financing-partners

Highlight 1: No investor is better off after the above deals. What went wrong? You see, these companies are not like Olam. The restructured zero-rated or low-yield bonds are effectively worthless and just buying time for the management to draw their paychecks. Such proposals are only worth accepting if the bonds are guaranteed by respectable new investors (Eg. GLCs, Chinese/Japanese Conglomerates, or foreign sovereign funds) OR there is a change-in-control of Hyflux and the new majority investor is highly-reputable (eg. Temasek taking over Olam).

Highlight 2: Do you notice that the above-mentioned, did not convert their perpetuals to fixed-date bonds? Doing so, will make the balance sheet look bad if perpetual debts (hybrid-capital) are converted to liabilities.

Highlight 3: The Devil is in the details. When such proposals are made, think about who sacrificed along with you. In Noble, we saw investment banks bailing themselves out with funds from secondary bond issues. Are the senior creditors of Hyflux granting similar debt extension at near-zero interests and you rank pari-passu with them?

Highlight 4: With more lawsuits from overseas, bankers, MTN group, and potentially from MAS/ACRA and retail investors, three-months make no difference. What they hint today, could be easily proposed a year ago. So ask ourselves why? What’s so special 3 months later? The next General Election is probably over in 3-months. We are sure that there is going to be a huge vote-swing with the pending GST hike, resale HDB price meltdown, losses in shipping, offshore & marine counters, TCB factor, etc. Every photo of the Hong Lim Park protest captured numerous white-haired retirees or former civil servants who are staunch supporters of PAP. There will be serious repercussions from the Hyflux scandal among the electorate and offering these false hopes can limit Hyflux's impact as an election-issue.

Highlight 5: I think we will continue to see waivers of rights to pursue management and auditors for past wrongdoings. That's the whole point! In the last round, didn’t they offer us a token 3% cash-back in exchange for such waivers? Likewise they don’t even dare to face liquidation because it will open a can of worms. Still remember the Board of Director mocking us up to the very last weekend before the scheme voting?

Highlight 6: Of all people, why was SIAS given the honour to leak this announcement. Look, SIAS is a whore, trying to stay relevant. They betrayed investors earlier by preaching repeatedly the acceptance of 3% cash-back in the media. They had failed to act in good faith, so in order to stay relevant, they get to do some intangibles, eg. break this piece of news. Simple as that.



What's the Ultimate Aim?
If you are a management staff of Hyflux, getting the waiver to cover your past misdeeds is your sole concern. For that to materialize, the restructuring needs to go through (not liquidation). Assuming that the earlier hindrance to the cramp-down on retail investors was the overwhelming NO-votes by MTN holders in senior class; the upcoming proposal is drafted with the objective of satisfying the MTN holders.

In Ezion's situation, their perpetuals are trading at about 75% discount.
HOWEVER their restructured bonds (used to exchange earlier ones) due 16 months later in August 2020 are trading at a just few % below par. https://www.bondsupermart.com/main/bond-info/bond-factsheet/UV3894705


In the same manner, Hyflux is likely to offer a 2-years low-coupon extension for their MTN bondholders. With just $250+m to repay within two years will be deemed an achievable target. This time, MTN holders will likely support in strength, and the restructuring will be through. Many naive retail investors will also cast supporting votes because financial engineering convinces them believe that there is no haircut on their PnPs (although Hyflux is likely to re-default when these longer-date debts are due).



What if God made Olivia repent during the Easter Weekend?
In life, I have seen too many bad and evil living happier and longer than many honest souls. I pray that the Almighty will sink the satanists. Olivia Lum had been a consistent liar and I have cited several reasons above, why today's announcement might be part of an elaborated scam to get her ass out of jail. Once she is convicted, it is definitely easier for retail investors and bankers to file claims against the board of directors for fraudulent practices. Fraud is more serious than negligence or oversight.

City Development has a 3.9% preference share (SGX Code: C70) listed on SGX for more than a decade. There is a redemption-clause but CDL almost made it a point that they will never redeem. If CDL redeem, they will pay you a significant premium over par (hinting you that they will not redeem) which will be opposed by ordinary shareholders. Of course CDL didn't issue this because they were in distress but it was for some special tax-waiver back then.

Assuming Olivia repented during the Easter weekend, she may be proposing a totally new (Non-cummulative, this time) preference share that Hyflux will never be redeemed, like the CDL NC Preference Share. Maybe we will get 5% a year, and it will take 20 years for Hyflux to repay the principal. Of course, then we have to pray hard that Hyflux will not collapse 20 years later but again, Olivia will probably be retired by then.



CONCLUSION
The management has nothing to lose with debt-extension. Even if they re-default a few years later after debt extension, management will have escaped or resigned by then. They are just doing this is avoid getting investigated or arrested. It is so obvious that there are false-accountings and misconducts involved but one can only speculate what's holding regulators back.

For retail investors, we are likely to be bombarded by new-found optimism in the media in the days ahead, so that Hyflux does not become an election issue. We need to pass the message around. Therefore I wish to emphasize that this is likely to be another con job if the debt extension does not come with fixed redemption date guaranteed by a reputable new stakeholder.

Of course, Olivia Lum is smart. But we still have our common sense.


Thanks for your insights, I hope this part will come true, if backed by a GLC

Assuming Olivia repented during the Easter weekend, she may be proposing a totally new (Non-cummulative, this time) preference share that Hyflux will never be redeemed, like the CDL NC Preference Share. Maybe we will get 5% a year, and it will take 20 years for Hyflux to repay the principal. Of course, then we have to pray hard that Hyflux will not collapse 20 years later but again, Olivia will probably be retired by then.
 

JustLikeThis

Alfrescian
Loyal
Thanks for your insights, I hope this part will come true, if backed by a GLC

Hyflux hit with fresh S$88m worth of claims
https://www.straitstimes.com/busine...ebt-moratorium-extension-hit-with-fresh-us65m
New lawsuits are appearing every month. Even those who never filed claims like PUB are putting up new claims. How is Hyflux going to assure investors that they are viable after debt extension?

Of course PUB is the most ridiculous bandit. Like thugs, they masturbated and put up an imaginary claim to justify that Tuaspring owes them money for contract breach, so that they can confiscate Tuaspring for free. It's like businessmen going around confiscating their suppliers when they receive a defective product. How fun!!!
 
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