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

[JustLikeThis]

Plotting The Next Move
Fulfilling Debtwire's Leak about EY's 90-95% Loss-Absorption Proposal and Debt-Equity Swap for Preference Shares and Perpetuals

On Feb 2018, Noble Group booked almost US$5 billion losses and restructuring fees.

If Hyflux is going to announce full-year results on Feb 2019, Hyflux is likely to book over $1 billion in losses due to operating losses, legal & restructuring costs, sudden cost over-runs in TuasOne, valuation-loss for Tuaspring, cumulative distributions for perpetual bonds, cumulative step-up coupons for preference shares, penalty-interests for bank loans, penalties for default of rentals and notes, several project-losses in Middle East and Africa, etc

Ernst & Young's Plot
The massive billion-dollar losses will wipe out all preference shares + perpetual bonds capital ($900m) and existing shareholders' equity to reset the company. The amount will scare all preference shareholders and perpetual bondholders to believe that they are sitting on total-loss and accept the 90-95% capital loss.

Management's Plot
This is the best time to write-off preference shareholders and perpetual bondholders so that it is easier to clock profits for new shareholders which will translate to performance-bonus shares for the management.

 

[bic_cherry]

https://www.sias.org.sg/edm/2019/Hyflux/Jan/

 

[Focus]

If Hyflux is going to announce full-year results on Feb 2019, Hyflux is likely to book over $1 billion in losses due to operating losses, legal & restructuring costs, sudden cost over-runs in TuasOne, valuation-loss for Tuaspring, cumulative distributions for perpetual bonds, cumulative step-up coupons for preference shares, penalty-interests for bank loans, penalties for default of rentals and notes, several project-losses in Middle East and Africa, etc

https://www.sias.org.sg/edm/2019/Hyflux/Jan/

I refer to the two quotes above.
My Take:

1. All restructuring companies like Swissco, Ezion, Erza, Noble & Noble take the opportunity to expose to crazy amount of losses to patch up their past false-accountings. Judging from the continued release of bad news in 2018, it is still kind of crazy to think that even water companies like Hyflux got such can of worms (losses) in hundreds of millions or billion within a financial year.

2. The date is set in Jan 2019. If there is really an annual0results announcement in February 2018, then financial figures must be so ugly that it is better for the management to hold the townhall before the annual results to avoid a riot.

3. Wait, did anyone notice that Townhall meeting is not organized for ordinary shareholders? It means ordinary shareholders will be diluted until non-existence and hints that notes, preps and prefs will be coaxed to accept steep haircuts.

4. Last but not least, this invitation has no time or venue information. No TIME SET at all, means they are fearful of huge turnouts. Trust me they will use the remaining money to protect the management

4. Everybody please attend the townhall, don't wait for others to spoon feed you the information. This is definitely a meeting for haircuts. Show up in numbers and drown the management. If there is an EGM by creditors, noteholders, preps and prefs, we can vote out the management. Of course, I hope the management will be arrested before the Townhall. Seriously, not police case, no SGX RegCo case, no CAD case, then we need regulators for what?

 

[Focus]

Trust me, they will use the remaining money to protect the management
This happened to Swissco, this will happen to us because we are not heard:

Swissco chairman for allegedly yelled 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?

http://www.hnworth.com/article/2017...e-bond-market-bail-in-ezion-holdings-and-gang

 

[Soul]

Faith and investing in Hyflux is because of Hyflux's political importance to Singapore. This is the mindset of the bankers and retail investors.

Today, this company is left to rot and scavenged by Indonesian vultures. This is our own version of Lehman Brothers or 1MDB.

As the voices of the affected are buried by the press, I am not surprised if this triggers a change in our political landscape without the incumbent realizing.

 

[JustLikeThis]

Tough year, but DBS pushes on to be go-to bank for Asia fixed income
https://www.businesstimes.com.sg/ba...hes-on-to-be-go-to-bank-for-asia-fixed-income

In the past, DBS benefited most from SGD bond issues because they were the underwriters, placement manager, distribute to their clients (high margin business) and even provide leverage (high margin business)

Now they acknowledge 2018 is tough but they market share did not drop (USD and SGD bonds). It is just that they lost the lucrative high margin part about selling the SGD bonds to their clients and bond-financing. Following the collapse in Oil-related counters, Noble and Hyflux, liquidity in SGD space is gone and most SGD bonds has almost no buyers in resale market.

 

[JustLikeThis]

4. Last but not least, this invitation has no time or venue information. No TIME SET at all, means they are fearful of huge turnouts. Trust me they will use the remaining money to protect the management

Yes, no time scheduled means that it is an half-hearted effort. Imagine they can ask investors to stay-by one day for them. Do you RSVP a wedding invitation that does not indicate the time? What does this tell you about the importance of you in the hearts of the couple getting married? It's like no choice got to invite you but I hope you better don't come. SO INSTEAD, EVERYONE SHOULD ATTEND!!!

Buying time is good for Hyflux because Hyflux can either be the poster boy of the new insolvency laws in Singapore which can force haircuts down the throat of the creditors or transfer viable business to offshore jurisdictions business like Noble:
https://shippingwatch.com/secure/Offshore/article11080787.ece

Also put yourselves in the shoes of the management. The second townhall is not about good news. Maybe they are pressured by authorities to hold second townhall and the management must have gauged that Jan is the best timing. We can expect worse announcements after Jan 2018 eg. results announcement or confirmation of restructuring package. Everybody die, except the "Happy" management

"Today is a Happy Day" - Olivia Lum
https://www.businesstimes.com.sg/co...knights-put-s530m-hyflux-rescue-plan-on-table

 

[JustLikeThis]

I am ok, you don't cry.
I don't feel sad at all.

 

[mojito]

Faith and investing in Hyflux is because of Hyflux's political importance to Singapore. This is the mindset of the bankers and retail investors.

Today, this company is left to rot and scavenged by Indonesian vultures. This is our own version of Lehman Brothers or 1MDB.

As the voices of the affected are buried by the press, I am not surprised if this triggers a change in our political landscape without the incumbent realizing.

Where got such thing as sure win sure safe investment? You take a risk you must do homework and not rely on pretty young things tell you what is what. How to blame the PAP for that?

 

[eatshitndie]

Where got such thing as sure win sure safe investment? You take a risk you must do homework and not rely on pretty young things tell you what is what. How to blame the PAP for that?

investment mantra 6.9. just avoid sinkie stocks altogether. problem solved.

 

[rushifa666]

Town hall one million tjmes also pointless. Unless you want to give them black eyes

 

[Soul]

Where got such thing as sure win sure safe investment? You take a risk you must do homework and not rely on pretty young things tell you what is what. How to blame the PAP for that?

In private Telegram discussions, the moderators are like you, just keep deleting and exterminating voices when people shared that it is PAP's policies, for the mess that we got into.

If Hyflux is not political, why PAP stopped Tuaspring from being sold to foreigner yet ok with Hyflux sold to Indonesians?
Do you know that Hyflux is even forced to buy gas from Temasek's subsidiary even when there is no need for it during low-season?

 

[Soul]

Town hall one million tjmes also pointless. Unless you want to give them black eyes

At least Lehman victims went to hong lim to protest. Hyflux investors feared offending the government if they protest.

 

[Soul]

Yes, no time scheduled means that it is an half-hearted effort. Imagine they can ask investors to stay-by one day for them. Do you RSVP a wedding invitation that does not indicate the time? What does this tell you about the importance of you in the hearts of the couple getting married? It's like no choice got to invite you but I hope you better don't come. SO INSTEAD, EVERYONE SHOULD ATTEND!!!

We are not friends of Hyflux. We are investors. We are like relatives to Hyflux, yes must invite relatives for wedding but there are always relatives that we don't like but die die must invite. Hyflux certainly makes things difficult for us to attend.

 

[JustLikeThis]

Dear Noble Investors and Bankers,

This article just confirmed that Noble and Noble's management successful run road liao.
https://www.bloomberg.com/news/arti...restructuring-now-effective-as-probe-drags-on

Do you understand? (You think the new company is New Noble Group)
Trust me, the next step will be to transfer valuable assets out of "New Noble Group".

 

[JustLikeThis]

Noble’s directors, advisers and creditors settled on a decision: with the listing blocked, the company would have no choice but to file for insolvency, activating a “plan B” method of carrying out the restructuring that had been part of its plans for months.They mulled various jurisdictions before settling on Bermuda, where Noble is incorporated and far from the reach of potential last-minute interventions by the Singaporean government.

In the end, they need not have worried. The hearing, in a small chamber of Bermuda’s Supreme Court, lasted just 30 minutes. The only lawyers to speak were representatives of the company and its hedge fund creditors. Less than a week later, New Noble was born, just in a different form.

Source: Bloomberg
https://www.bloomberg.com/news/arti...-raid-derailed-noble-group-s-story-of-rebirth




In May 2016, MAS allowed Hyflux to issue retail perp bonds to repay those sold to accredited investors when the credit metrics were weakening.

The escalation of company PD levels in 2017 therefore show a significant increase in company risk levels on an absolute basis but also when compared to that of its global peers. Fundamental PDs produced over the course of 2017 and into H1 2018 highlights several areas of financial risk elements which were driving risk levels continually higher. As of Q1 2018, the company had a financial risk assessment from PD Fundamentals as highly leveraged. Over the course of 2016, sales growth became negative and moved from a high point of 152.5% y-o-y sales growth in Q3 2016 to a low of -53.48% y-o-y sales growth in Q3 2017. This contraction in sales revenues led to a situation where the company was under increasingly constrained liquidity.

The combination of these factors – declining sales revenues, increasing leverage and erosion of profit margins, prompted the company to enter into court supervised debt restructuring conversations.

Source: Standard & Poors
https://www.spglobal.com/marketintelligence/en/documents/ca-case-study-hyflux_final.pdf



Summary:
- Singapore regulators had a lot of time to intervene but tried hard not to.
- In their hearts, they just want one less embarrassment for Singapore.
- Toothless tiger just pretended to bite when they are sure that the wrong-doers will escape.

Hyflux will be following the foot-steps of Noble closely.
Shame on you, Singapore's good-for-nothing regulators, who are more interested to save their asses and faces than to bring justice for the Noble and Hyflux investors.

 

[JustLikeThis]

We are not friends of Hyflux. We are investors. We are like relatives to Hyflux, yes must invite relatives for wedding but there are always relatives that we don't like but die die must invite. Hyflux certainly makes things difficult for us to attend.

I believe less will turn up in second townhall because there will only be a short notice after disclosing the venue and time.

 

[gummybear]

Not only Hyflux and Noble, there are still many more.....
What to do? Lehman minibond investors still can kpkb...

But what can the investors of Hyflux and noble to do?
There are still many more investors were cheated by china company listed in sgx last time.
So many years and yet they still no do anything to protect local investors....

 

[JustLikeThis]

Moody's explains that the restructuring could involve for Hyflux creditors a combination of haircuts, the extension of debt maturities or adjustments to interest rates, leading to possible financial losses. On Hyflux in particular, Moody's says that the company has a large amount of secured debt, which heightens the risk to its unsecured creditors. Moody's points out that 68% of Hyflux's debt is unsecured, with 51% in unsecured bank loans.

https://www.moodys.com/research/Moo...dit-negative-but-not-indicative-of--PR_384307
https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1126767

 

[JustLikeThis]

Perhaps less will turn up for second townhall because the venue and time is still not announced by now.