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

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market rumour:

Hyflux is unable to fetch a fair price for Tuaspring (water + power plant) because PUB is still hindering foreign buyers from putting up competing bids against low-ballers Keppel and Sembcorp.

Hyflux is now exploring sales of her 75% stake in TuasOne (Waste-to-Energy) plant which is significantly more valuable and profitable because it can process 3,600 tonnes of waste per day and generate 120 MW of clean and renewable energy each day.

TuasOne does not involve water plants and will not come under the mercy of PUB. With raising energy prices and USEP, will TuasOne bail out Hyflux?

 

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In a tangible way, accountants and lawyers need to prove their worth in bankruptcy cases by making lenders and investors write-off their exposure to the insolvent company right? Hey, then why our regulators never do their job and prove their worth?

TUE, OCT 02, 2018 - 5:50 AM
Hyflux case cited to show benefits of new insolvency, restructuring law
https://www.businesstimes.com.sg/ba...-benefits-of-new-insolvency-restructuring-law
https://www.businesstimes.com.sg/go...ring-and-dissolution-bill-has-passed-into-law

The Insolvency, Restructuring and Dissolution Bill passed into law on Monday would restrict creditors from exercising such rights solely on the basis of the debtor’s filing of a restructuring moratorium. Senior Minister of State for Law Edwin Tong cited Hyflux as an example that could have benefited from the omnibus Bill that consolidates personal and corporate insolvency and debt restructuring laws into a single piece of legislation.

Hyflux, knee-deep in debt, filed for court protection against creditors’ claims in May - before the Bill comes into effect.

 

[bic_cherry]

When Hyflux collapses, PUB can get to intervene and take over the assets for almost free. Even better right?

Then all retail investors of Hyflux perpetual securities and bonds must vote for the opposition to avoid supporting a corrupted and sneaky Singapore PAP government which has not only failed to make amends and compensate for it's reckless 8 million population plan and instructions but ALSO , worse, attempts to betray and capitalize on the misfortunes of those who supported the PAP's 8million population target.

PAP will soon find itself in a very lonely place after it loses the trust of its supporters who will view it as merely a lightweight populist political party with zero responsibility for it's own actions/decisions.

 

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Then all retail investors of Hyflux perpetual securities and bonds must vote for the opposition to avoid supporting a corrupted and sneaky Singapore PAP government which has not only failed to make amends and compensate for it's reckless 8 million population plan and instructions but ALSO , worse, attempts to betray and capitalize on the misfortunes of those who supported the PAP's 8million population target.

PAP will soon find itself in a very lonely place after it loses the trust of its supporters who will view it as merely a lightweight populist political party with zero responsibility for it's own actions/decisions.

The rumor is true and market is stunned like vegetable now.

 

[JustLikeThis]

market rumour:

Hyflux is unable to fetch a fair price for Tuaspring (water + power plant) because PUB is still hindering foreign buyers from putting up competing bids against low-ballers Keppel and Sembcorp.

Hyflux is now exploring sales of her 75% stake in TuasOne (Waste-to-Energy) plant which is significantly more valuable and profitable because it can process 3,600 tonnes of waste per day and generate 120 MW of clean and renewable energy each day.

TuasOne does not involve water plants and will not come under the mercy of PUB. With raising energy prices and USEP, will TuasOne bail out Hyflux?

PUB only allowed Sembcorp and Keppel to bid, foreign buyers rejected. Sembcorp's offered price is only about 1/3 of Tuaspring's book value.
Not enough for paying Maybank, nothing left for shareholders and bondholders. Hyflux will be insolvent.

Sembcorp is only bidder for Hyflux's Tuaspring plant: sources
The offer is said to be below book value and will not be enough to fully pay back loans to the project's main creditor
https://www.businesstimes.com.sg/co...ly-bidder-for-hyfluxs-tuaspring-plant-sources

SEMBCORP Industries Ltd was the only party that submitted a final bid for beleaguered Hyflux Ltd's Tuaspring project, which includes South-east Asia's biggest desalination plant, people with knowledge of the matter said.

Sembcorp's offer was below Tuaspring's book value and will not be enough to fully pay back loans to the project's main creditor, Malayan Banking Bhd, according to the sources. Keppel Corp, which had earlier shown interest in the asset, did not submit a binding bid by the Oct 1 deadline, the sources said, asking not to be identified because the information is private.

The two Singaporean companies were the only suitors granted approval by the Public Utilities Board, which regulates the city-state's water supply, to study detailed information on the asset, the sources said.

There are overseas investors who remain keen on Hyflux's entire business and may be willing to refinance Maybank's Tuaspring loan, though any investment could again hinge on the Singapore regulator's approval for the Tuaspring ownership, according to the sources.

 

[SNTCK]

Semb Corp should not buy over Tuas spring
This lousy Tuas spring can only burden the company

I really do not wish semb Corp to buy over this Tuas spring

To save Hyflux, they should sell their valuable Assets to foreign company.

So now want to see semb Corp and Hyflux die together ?

 

[SNTCK]

All these force by pap

Semb Corp still have to fine 100M and where got so much money to buy this rubbish ?
Must be pap

And Hyflux has potential foreign buyer and die die don’t allow them to sell to foreigner

So want to see semb Corp and Hyflux Sink together

Phew pap

 

[bic_cherry]

The rumor is true and market is stunned like vegetable now.

During bond and perpetual securities meeting, Olivia Lum clearly stated that Tuas Spring power and water desalination plant was in compliance with PAP 8 million population target and instructions. Due to PAP policy about turn, Hyflux is trapped by the large amounts of fuel gas which Hyflux had contracted to buy based on PAP government economic and 8 million residentpopulation target.

Lee Hsein Loong should speak to his wife in bed and ask her to bring Temasek to the rescue with a hyflux share buy out or a reasonable (pre-correction of population projection) valuation price for Tuas Spring so retail investors of preference shares can redeem their investment or at least principal in full.

Otherwise, PAP will lose 50,000 votes from Hyflux retail and institutional investors in coming election for setting irresponsible targets and giving false instructions which caused their financial loss.

 

[JustLikeThis]

During bond and perpetual securities meeting, Olivia Lum clearly stated that Tuas Spring power and water desalination plant was in compliance with PAP 8 million population target and instructions. Due to PAP policy about turn, Hyflux is trapped by the large amounts of fuel gas which Hyflux had contracted to buy based on PAP government economic and 8 million residentpopulation target.

"Olivia Lum told the court through a June 14 affidavit that she was "confident" improving conditions will allow the plant to be sold at or above its S$1.3 billion book value." https://www.businesstimes.com.sg/co...m-creditors-company-in-talks-for-s200m-rescue

She wouldn't be confident for no reason as such "forward-looking" statements are her responsibility in Court or as the head of a publicly-listed company. Obviously, now we know that the serious buyers are blocked by PUB, and Sembcorp just chin chai lowball.

 

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Maybank, Hyflux to consider other options as Sembcorp’s Tuaspring bid too low

Thursday, October 4th, 2018 at , Economy | News

MALAYAN Banking Bhd (Maybank) and Hyflux Ltd are expected to explore other options after Sembcorp Industries Ltd emerged as the only bidder for the latter’s Tuaspring project in Singapore, said RHB Research Institute Sdn Bhd. “We believe that Hyflux and Maybank will unlikely accept a bid that is too low and are likely to explore other options,” RHB Research said in its research report yesterday.

The report also said there are overseas investors who remain keen on Hyflux’s entire business and are willing to refinance its liabilities.
“However, any investment could again hinge on the local regulators’ approvals for the Tuaspring ownership.

“Our sensitivity analysis, assuming bid offers at 20% to 40% of Tuaspring’s book value, suggests that our forecast for Maybank’s 2018 financial year net profit could be lowered by 1% based on a sale at 40% of the latter’s book value,” RHB Research noted.

It added that the net profit forecast would drop 8.6%, if the bid is done at a low 20% of Tuaspring’s book value.

 

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NOMURA Securities- "Maybank may not get full payment of loans" and when that happens, preference shares and perpetual bondholders risk facing TOTAL-LOSS

Hyflux is holding good water and power assets which are highly sought-after by global investors , however state-organs are taking advantage of the cashflow issues and holding Hyflux hostage by denying serious ASEAN, Chinese and Japanese investors from bidding at fair market value. If Maybank cannot get full payment of their secured loans (about LTV 40% of Tuaspring's book value), bondholders face partial write-downs and possibility total-loss for preference shares and perpetual bondholders.



https://www.thestar.com.my/business...ort-maybank-may-not-get-full-payment-of-loans
(Maybank) may not be able to receive a full payment of loans taken by Singapore’s global environmental solutions company Hyflux Ltd, according to Nomura.
Nomura said the lack of bids raised the risk of more provisions in the future for Maybank, as the divestment process might take longer to materialise. Maybank’s collective exposure for project financing of Tuaspring’s IWPP and TuasOne’s WTE Plant amounts to S$659mil (RM1.98bil), of which the IWPP makes up 90% of the total exposure, with the remaining 10% by the WTE plant. Both exposures secured against the project assets.

 

[SNTCK]

What can investors to do if can’t get back one cent ?

Just accept life ?

 

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Speculations:

As it is becoming clear that the sale of Tuaspring will not bail out Hyflux, Singapore is feeling uneasy about the prospect that Tuaspring will fall into Maybank's control. Now, market is speculating who will take over the whole Hyflux eventually?

• With the blessings of regulators to acquire Hyflux, the prospective local strategic investor demanded near-50% haircut in scheme of arrangement with unsecured lenders and bondholders during initial negotiations. Does not wish to be named, if the offer does not materialized.

• Without direct-regulatory blessing, the prospective foreign strategic investor has offered to exchange Hyflux's unsecured debts, for buyer-guaranteed zero-rate straight bonds ("new-bonds") with 3-5 years maturity, for a gradual increment of shareholding for honoring these new-bonds along the way. Mandatory-Offer Waiver from Securities Industry Council is required because a premature ownership of Hyflux (Tuaspring) will trigger PUB's objection. The proposal demands the waiver of all unsecured-debt interest-payments for 5 years to revitalize Hyflux, and assumed Hyflux to have either sold Tuaspring for a more respectable price by Year-5 (pathing way for foreign investor to be majority shareholder of Hyflux), or reaping positive margins from Tuaspring if energy-price recovery is sustainable.

News Reference: October 10, 2018
Hyflux’s talks with investors ‘positive’ but analysts hope for updates on Tuaspring sale
https://www.channelnewsasia.com/new...lks-with-investors-positive-analysts-10808212

SINGAPORE: As the crucial sale of its biggest water and power plant remains a work in progress, Hyflux being in advanced talks with at least two potential strategic investors has been described by some analysts as a welcomed update amid a closely-watched restructuring process.

The beleaguered water treatment firm, which shockingly announced a court-supervised reorganisation of its business in May and later obtained an additional six-month moratorium in June, said on Monday (Oct 8) that it is “moving very quickly” in terms of discussing possible new financing with strategic investors.

It is in advanced talks with at least two potential parties and hopes to conclude them by November, its legal advisors from WongPartnership told the court during a status conference. Deals with strategic investors will help to determine if the company’s debts can be paid in full and pave the way for negotiations on the terms of restructuring with various creditor groups, the lawyers added.

 

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Noble Group on Wednesday (Oct 10) flagged that Yancoal Australia Ltd and certain of Yancoal's affiliates intend to file objections to the constitution of classes and the schemes under the restructuring plan put out by the commodities firm. Yancoal, which is labelled as a potential "other scheme creditor", is also set to challenge the jurisdiction of the English courts.

"The company's advisers note that objections of the nature raised by Yancoal are not uncommon in complex international restructurings," Noble said in its statement. "The board continues to strongly believe that the restructuring is in the best interest of all stakeholders."

https://www.straitstimes.com/busine...from-yancoal-over-terms-of-restructuring-plan

 

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Noble Group on Wednesday (Oct 10) flagged that Yancoal Australia Ltd and certain of Yancoal's affiliates intend to file objections to the constitution of classes and the schemes under the restructuring plan put out by the commodities firm. Yancoal, which is labelled as a potential "other scheme creditor", is also set to challenge the jurisdiction of the English courts.

"The company's advisers note that objections of the nature raised by Yancoal are not uncommon in complex international restructurings," Noble said in its statement. "The board continues to strongly believe that the restructuring is in the best interest of all stakeholders."

 

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Will Hyflux's white knight appear?
https://www.zaobao.com.sg/zfinance/news/story20181014-898942

Article summary:
If the government insists that the water and power plant can only be sold to a local company, then the solution has be a government intervention; through privatization or sale to a GLC at a reasonable price, to protect national interests. Otherwise, Singapore should consider the recent market-liberalization model of our public bus sector (served by two UK bus operators).

 

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Latest: Hope for the best with DBS's involvement. Will DBS save the day?

 

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Noble forcing perpetual bonds holders to absorb 93.5% capital reduction on their par value.
http://infopub.sgx.com/Apps?A=COW_C...rities Exchange Offer Launch Announcement.pdf

Management laughing all the way to the bank.

 

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Noble forcing perpetual bonds holders to absorb 93.5% capital reduction on their par value.
http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&B=AnnouncementLast3Months&F=AWGPI0WHQZAEKM8N&H=5bcbe31522cc26fd984e940d7bb8de838fb63255b8f4d8380f04795c8e232981&fileId=Perpetual Capital Securities Exchange Offer Launch Announcement.pdf

Management laughing all the way to the bank.

Hyflux following Noble's path?
Meltdown in secondary OTC market price quotes for Hyflux Preference Shares and Hyflux Perpetual Bonds today.
Bid - Ask crashed to 5:25 level

Source:
https://www.bondsupermart.com/main/bond-info/bond-factsheet/SG2D17969577
https://www.bondsupermart.com/main/bond-info/bond-factsheet/LW1439220