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

[Focus]

Saw this extract from an article in the business times. Seems like CPF board screwed up and allowed CPF money to be invested in hyflux perpetual preference shares when they were more akin to bonds. Some idiot saw the word "shares" in the instrument and exempted it from Ratings requirement even though it had all the characteristics of a bond:
https://www.businesstimes.com.sg/brunch/insolvency-limbo-the-sgd-bond-market

And it's no longer just accredited investors who are facing losses, but more than 20,000 non-accredited mom-and-pop investors as well. Hyflux is seeking to restructure S$900 million in face value of perpetual securities and perpetual preference shares and will soon make contact with retail investors. The pain here could cut deep as investors were allowed to use their Central Provident Fund (CPF) savings to ballot for Hyflux's S$400 million preference share offering in 2011.

Although many investors viewed perpetual preference shares as bond-like instruments no different from perps, the CPF board considers preference shares as shares rather than bonds, so the requirement that CPF-qualified bonds must be rated at least A2 by Moody's or A by S&P or Fitch did not apply.

On the other hand, Hyflux's unrated perps issued later in 2016 did not qualify as CPF-investable.

...
https://sbr.com.sg/source/zuu-online/singapore-bond-market-headed-downturn-year

But Singapore’s bond market is unique in the respect that large numbers of individual investors are bondholders. In western markets, it is usually institutional investors who take up bond issues. A Reuters report reveals that some high-yielding Singapore dollar bonds are held by more than 100 individual investors. There are no institutional investors involved at all.

Why should this matter? In fact, this point becomes crucial in the event of a default. Individual investors have relatively limited resources and find it difficult to coordinate their efforts to pressurise defaulting bond issuers...

MAS deputy managing director Jacqueline Loh has said that the regulator has “… received feedback calling for a review of the regulations and market practices around the Singapore bond market. Some ideas include… recourse for investors when a bond defaults…. We are considering these feedbacks and will respond soon”.

- this sbr article seems to have been written in 2017,not sure. So what changes has MAS come up with since then after receiving feedback? Instead of protecting bond holders, they protect the companies with a new insolvency regime:

http://www.mondaq.com/x/712376/Inso...w+Insolvency+Restructuring+Regime+One+Year+On

Notable companies that have benefitted from the new restructuring regime include Nam Cheong Limited, EMAS Offshore Limited, Hoe Leong Corporat ion Ltd, PT Bakrieland Development Tbk and China Sports International. Most recently, Hyflux Ltd and Pacific Radiance have also filed for court protection under this new restructuring regime to reorganise their debts and business. Going forward, we can expect to see even more Singapore and foreign companies utilising these rehabilitation tools.

WHAT THE FUCK IS RAVI MENON and the MAS doing??? The Pundek is trying to destroy all confidence in the bond market and sacrifice the bond holders? This is tantamount to a bailout of the restructured companies using the people's money instead of a government bailout.

The government has truly become so arrogant as to ignore the political consequences of choosing business interests over the people's interest.

These kind of valuable insights will not be published on our local press. Sweep under the carpets and let 50000 die.

 

[Empower]

Extracts from ASTREA Investors' Day this morning - a Temasek unit specialising in investments in private equity
(retail bonds listed on SGX)

An investor asked a great question on how the NAVs were calculated given the illiquid nature of the underlying asset class. He cited the example of Hyflux where the stated book value and market values diverged greatly.

hahaha, unlike the herd, this investor was enlightened, he understood that Hyflux's book-values were cooked.
http://theasiareport.com/astrea-investor-day-2019-write-up-thoughts

Big brother, I was hoping temasek saves Hyflux, using funds in ASTREA or Heliconia. Looks like no chance since Hyflux was mentioned.

This is a forum letter this morning asking Temasek to help
https://www.straitstimes.com/forum/letters-on-the-web/temasek-a-better-white-knight-for-hyflux

 

[Empower]

These kind of valuable insights will not be published on our local press. Sweep under the carpets and let 50000 die.

Hofmann's opinions are sharp and clear. Hofmann should share on Facebook.

 

[Empower]

Hyflux just reminded investors not to believe in media leaks. But so far Hyflux's managment are the ones generating fake news, misrepresentations and empty promises.

https://links.sgx.com/1.0.0/corpora...4cfc90d5a2f7ae83bc63ea3ed5925d54efca2f5049084
The shareholders and holders of the securities of the Company are advised to disregard all media speculation and only rely on what is announced.

 

[Empower]

Extracts from ASTREA Investors' Day this morning - a Temasek unit specialising in investments in private equity
(retail bonds listed on SGX)

An investor asked a great question on how the NAVs were calculated given the illiquid nature of the underlying asset class. He cited the example of Hyflux where the stated book value and market values diverged greatly.

hahaha, unlike the herd, this investor was enlightened, he understood that Hyflux's book-values were cooked.
http://theasiareport.com/astrea-investor-day-2019-write-up-thoughts

SGX don't dare to mention Hyflux's stated book value and market value diverged greatly.
https://www.straitstimes.com/busine...uditing-of-listed-companies-with-proposed-new

Some market observers were critical of Singapore regulators, saying they did not do enough to protect minority investors as the Noble saga unfolded. The SGX is also planning to raise valuation standards for listed companies. Valuations by some companies have been questioned by minority shareholders in cases like Vard Holdings' delisting and ISR Capital's purchase of a Madagascar mining asset.

 

[Dr Christopher Cheok C S]

Dear Hyflux uncles and aunties,
young guru laughing at you, teach you how to buy invest okay?

 

[Empower]

Government don't care about us.
Can we rally everyone to ask their friends and relatives to make a change of the government so that a new government will be more willing to help us?

 

[gummybear]

Laugh die me

 

[Rutherford]

Just accept your loss and move on!

 

[zhihau]

unpinned as per request.

 

[JustLikeThis]

unpinned as per request.

Thank you brother @zhihau. Thank you @Leongsam and our forum for helping. This is the only place in Singapore that gave us a prominent exposure to share our plight. We did our best to help while most only asked others to voice-out but not do it themselves. These victims got no balls, and belittled those who wanted to seek help from opposition lawyers, for the fear of offending PAP.

Yes, someone just sent me these. These people are hopeless. Crazy, they even mocked at our forum.
Shame on them for mocking us when our forum put in real efforts to help.

That is why i request our thread to be unpinned, such selfish people don't deserved to be helped.

 

[Empower]

Thank you brother @zhihau. Thank you @Leongsam and our forum for helping. This is the only place in Singapore that gave us a prominent space to share our plight. We do our best to help and most only know to ask other to voice out but not do it themselves. These victims got no balls, and belittled those who want to seek help from opposition lawyers for the fear of offending PAP.

Yes, someone just sent me these. These people are hopeless. Crazy, they even mocked at our forum.
Shame on them for mocking us when our forum put in real efforts to help.

That is why i request our thread to be unpinned, such selfish people don't deserved to be helped.

Big brother, Singaporeans know that government response will be largely dismissive, condemnatory and repressive. Instead of maintaining order through genuine regulations in our financial system, our country would rather suppress any escalation of public outcry over these scandals.

Like the title of this thread, regulators refused to act and don't care about retail investors at all, except suppressing affected investors when their own hegemony is threatened.

 

[JustLikeThis]

Big brother, Singaporeans know that government response will be largely dismissive, condemnatory and repressive. Instead of maintaining order through genuine regulations in our financial system, our country would rather suppress any escalation of public outcry over these scandals.

Like the title of this thread, regulators refused to act and don't care about retail investors at all, except suppressing affected investors when their own hegemony is threatened.

 

[rushifa666]

Dont talk to retards and expect anythjng else.

 

[rushifa666]

Btw sinkie jnvestors have never done anything ever to fraudulent companies. They just expect nanny state to step in.

 

[JustLikeThis]

Affected investors please take note, these idiots give us only 2 weeks to file claims - especially if you bought with nominee accounts (with leverage) or CPF OA accounts
https://links.sgx.com/1.0.0/corpora...b239fe9641c1ce12990e229116101ea97e8ef1f59876a

Important Note: The proposed chairman for Hyflux's Scheme Meeting is Ee Meng Yen Angela from EY, who helped chairman to rough-handled swissco's investors

https://tradehaven.net/2017/08/14/the-great-singapore-bond-market-bail-in-ezion-holdings-and-gang


A good friend who has been a long time critic of the O&G bond influx back in 2013-2014, summed it as “chao kuan” (Hokkien for bad form) issuers. Bonds were sold fully loaded with hidden bail-in implications, holding investors to ransom simply because there was nothing much to recover in the case of default. She wrote in some old blog posts about recovering just the “photo copiers and printers” for some scenarios.

The “Chao Kuan” award should go to Swissco chairman for allegedly yelling at an investor during restructuring talks, “You can walk out of here, you won’t get a cent back”, with 5 Cisco guards on his side. If it is true, of course.

What little recourse do bond investors have in the face of all this ?

 

[JustLikeThis]

BLOODY Important Note 2: The bitch is from EY, the audit firm that proposed 90-95% loss absorption.
Her hands are stained with blood in other corporate restructurings.

Reference: https://links.sgx.com/FileOpen/Announcement - 1 Feb 2019.ashx?App=Announcement&FileID=542488
If no Proof is filed by the holder of any of the Securities, the Proposed Chairman will admit for the purpose of the Scheme Meeting(s), all amounts in respect for the purpose of the Scheme Meeting(s), all amounts in respect of the holdings of that party reflected in the records of the Central Depository Pte Ltd (“CDP”).

Any party who is required to and does not file their proof of claim by 5.00pm on Friday, 15 February 2019 will (subject to the Proposed Chairman’s discretion) not be entitled to vote at the Scheme Meeting(s), and may not be entitled to any payments or distributions made pursuant to the compromise or arrangement that will be voted upon at the Scheme Meeting(s). In such event, all their claims against the Scheme Companies as well as all obligations the Scheme Companies have towards them will be forever varied, waived, released, discharged and/or extinguished in accordance with the terms of the said compromise or arrangement.

 

[JustLikeThis]

Important Note 2: The bitch is from EY, the audit firm that proposed 90-95% loss absorption.
Her hands are stained with blood in other corporate restructurings.

Reference: https://links.sgx.com/FileOpen/Announcement - 1 Feb 2019.ashx?App=Announcement&FileID=542488
If no Proof is filed by the holder of any of the Securities, the Proposed Chairman will admit for the purpose of the Scheme Meeting(s), all amounts in respect for the purpose of the Scheme Meeting(s), all amounts in respect of the holdings of that party reflected in the records of the Central Depository Pte Ltd (“CDP”).

Any party who is required to and does not file their proof of claim by 5.00pm on Friday, 15 February 2019 will (subject to the Proposed Chairman’s discretion) not be entitled to vote at the Scheme Meeting(s), and may not be entitled to any payments or distributions made pursuant to the compromise or arrangement that will be voted upon at the Scheme Meeting(s). In such event, all their claims against the Scheme Companies as well as all obligations the Scheme Companies have towards them will be forever varied, waived, released, discharged and/or extinguished in accordance with the terms of the said compromise or arrangement.

Honestly, does old retirees understand or aware of the above mentioned?
Minus away the upcoming holidays, almost no time to react.

Angela had been ruthless all these while.

 

[JustLikeThis]

Despite these being retail bonds, the way EY structured these are like for secondary market.
Securities firms have insufficient time to react and inform affected shareholders who bought with cash, CPF or leverage, due to the coming Chinese New Year.

I hope people come to your senses to stop thinking that Hyflux management is kind or supportive. They are rough-handling us.
Although the claims form did not mention accrued interests, they are cumulative in nature. I have no legal training in debt restructuring laws but you should retain the right to vote against steep haircuts, and not cede these rights to the biased EY chairman for the scheme meeting.

 

[JustLikeThis]

Insolvency, Restructuring and Dissolution Act 2018, which will come into operation sometime in 2019.

The restructuring of the Hyflux Group attracted significant attention in 2018 on the issue of the level of disclosure required of an applicant under the Section 211B moratorium regime. Hyflux is a Singapore-based water and fluid treatment specialist whose principal business activities include the operation and maintenance of water treatment and waste plants. It operates and manages numerous treatment projects in Singapore (eg, the Tuaspring Integrated Water and Power Project) and worldwide. On 22 May 2018 Hyflux and five of its subsidiaries applied for protection under Section 211B of the Companies Act from their creditors in respect of the approximately S$1.8 billion bank debt, S$900 million subordinated debt, S$265 million medium term notes and S$360 million trade debt.

On 22 May 2018 the Hyflux group applied under Section 211B(1) of the Companies Act for a moratorium. The automatic 30-day moratorium period was extended by the High Court for the first time on 19 June 2018 and a second time on 26 November 2018.

At the hearing on 19 June 2018 for the initial extension, Hyflux requested a six-month moratorium on the basis that a short-term runway creates uncertainty and may discourage third-party financiers from extending support. The company at that time required breathing space in order to discuss its intended plan with the various stakeholders.

The court directed Hyflux to appear before it at the three-month mark (ie, midway through the moratorium period) and provide an update on its restructuring. The court considered that this would be an adequate safeguard for stakeholders that were concerned about the six-month extension sought.

However, on 4 October 2018 UWG, a creditor of Hyflux, filed an application in court seeking to compel the disclosure of various documents and information, such as:

• a detailed breakdown and analysis of financial statements and monthly management accounts;
• trade debts;
• cash position;
• copies of all court documents of material disputes; and
• a detailed summary of the investor process and negotiations with interested parties.

UWG and other creditors were concerned about Hyflux's communication with creditors on the restructuring and level of disclosure of financial information. Although Hyflux had disclosed certain information required under Sections 211B(4) and 211B(6) of the Companies Act (eg, the brief description of proposed restructuring, a list of creditors, valuation of significant assets, cash flow forecasts and monthly management accounts), UWG, the noteholders and bank creditors felt that the information disclosed was insufficient.

Section 211B(6) of the Companies Act provides that companies must provide "sufficient information relating to the company's financial affairs to enable the company's creditors to assess the feasibility of the intended or proposed compromise or arrangement". Further, Section 211B(6) states that such information may include:

• a valuation report of the company's significant assets;
• information on any acquisition, disposal or grant of security over any property;
• periodic financial reports; and
• profit and cash flow forecasts.

However, there is little guidance on the extent or quality of such information to be disclosed, as can be seen from the ongoing matter involving the Hyflux group. At the status conference on 8 October 2018, UWG and various creditors raised concerns that there was a lack of sufficient or meaningful information and updates about the reorganisation process to be able to develop and understand their rights as creditors of a company undergoing restructuring. UWG further argued that the information requested was necessary to assess:

• Hyflux's financial position;
• the possible recovery; and
• whether SM Investment's entry as a strategic investor provided reasonable value.(13)

In response, Hyflux argued that it had complied with the mandatory disclosure obligations and that fulfilling requests for extensive information would place a strain on limited resources during the reorganisation. In its view, creditors should only be provided with certain information at the start of the restructuring process. Additional information would be provided when it was time for the creditors to evaluate the restructuring proposal, but that such information was excessive at this stage. This argument was rejected by UWG because allowing the debtor to decide what information is to be disclosed to creditors would inevitably prejudice the interests of the creditors. It was reported that parties subsequently agreed that Hyflux would disclose the following information to all of its creditors:

• financial models for projects;
• cash flow forecasts;
• business and assets valuations;
• details of material disputes; and
• a summary of the investor search and asset sale process.

Although the exact breadth of disclosure expected of an applicant under Section 211B(6) of the Companies Act remains to be seen, the ongoing restructuring of Hyflux has highlighted the conflict over the level, scope and quality of information to be disclosed to creditors in a debtor-in-possession restructuring. From the creditors' perspective, the current statutory disclosure obligations under Section 211B of the Companies Act are insufficient.




https://www.internationallawoffice....-following-recent-amendments-to-Companies-Act