I got some reviews from the legal this morning after their holiday break:
Generally speaking, we should wait for the more details from AM. However, he speculated that AM is likely to be "acting in concert" with Hyflux management & Utico because
1. His sources shared with him that AM don't really have much money, StormHarbour is not a big investment banker and big boys will not use such firms. StormHarbour is just a boutique finance firm meant to serve as proxy (less paperwork required and cheaper). They can only afford to buy selectively within their limited budget, to reach a specific target group.
2. The sub-15% offer is not meant for big notesholders or bankers. These people know they can get a lot more under Juridical Management.
3. On hindsight, the tender offer targets the small businesses and desperate notesholders. There are numerous small businesses making claims on Hyflux and AM's offer is a cheap and efficient way of buying headcounts from this group to support the restructuring. Small businesses have tax-incentives to accept a 15% offer and recognize the losses in their P&L. Effectively, a 15% offer from AM and writing off the remaining 85% in a profitable company works out to be almost 30% back (assuming 17% tax rate) and they move on.
4. Off-the-records, our legal highlighted that Hyflux and SGX are playing dirty. In mid-August 2018, Deutsche Bank made a similar offer for Noble bondholders to shore up support for the restructuring. Back then, Deutsche Bank explained that they are acting on their own behalf being an investment bank and their tender offer was on the news but never publicly announced on SGX like AM's offer for Hyflux. Yet, Hyflux's management actively communicated this to the stakeholders when it is not their responsibility and biased to do so. SIAS went on to create the false impression that retail investors are also keen to be in discussion.
5. In actual fact, AM's offer is considered a private-treaty agreement because Hyflux's bonds are suspended from trading. If you agree to AM's offer, you are still the rightful bondholder until trading suspension is over. AM is only acting on your behalf during voting and they will only be the bondholder in CDP's records after trading resumes. Rightfully, AM should place advertisements on media and Hyflux's management should not be biased on help AM because this is not a general offer prospectus under MAS codes. Legally, CDP or Hyflux should also not leak contact information to AM to send offer information to individual notesholders. Otherwise, anyone of us can simply make a 0.01% offer on Hyflux's debt with the intention of getting the full list of stakeholders for class action. Clearly, there's some underlying purposes or conflict of interests, for these to happen.