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

[JustLikeThis]

In additional to Ed Chan, another few helpful gentlemen who bothered to share excellent insights this week about the nonsense that Hyflux investors faced.
Hope more affected investors will voice out in open platforms

Extracts from http://sgdividends.blogspot.com/2019/02/the-overlooked-importance-of-another.html

My Thoughts

Tuaspring is a power plant that uses only LNG gas as fuel to generate electricity. Chairwoman and CEO Olivia Lum stated in the townhall two factors (among others) that caused Tuaspring failure.

The expensive "take or pay" contract for LNG gas and the weak electricity market resulting in the low USEP ( market price of electricity).

She mentioned that based on the "take or pay"contract it is still cheaper to take the gas and burn it, even if it is not needed due to penalties.

Is this contract onerous due to the need to support the LNG terminal, a national ambition?

Was Tuaspring restricted from using the cheaper pipeline gas from Indonesia or Malaysia?

Without the restrictions by EMA on using the cheaper pipeline gas, would Tuaspring have survived?

Is Tuaspring failure on a purely commercial basis?


Conclusion
I don't think the failure of Hyflux is due purely to commercial decisions as can be seen above. Poor policy planning also played a part in its failure. This does not mean i'm thinking of absolving Hyflux Board of Directors of any responsibility, because they are definitely responsible. But i do not think that the regulators, both EMA and PUB should be silent on this issue.

It is also very ridiculous that the biggest three power generation companies ( YTL Power Seraya, Huaneng and Tuaspower) in 2014 issued a warning call to EMA that the market was unsustainable.

The words used were" ...long term damage..." and " ...unsustainable/market failure..". I wondered whether EMA heeded any of these warnings from the industry. I do feel a tinge of betrayal where the $500 million perpetual securities were still issued in 2016 to unsophisticated retail investors when such problems have already been brewing and EMA can't presume to not know about this, especially since they already received the feedback in 2014. Or maybe, just maybe...They don't care...maybe EMA is secretly happy that these retail investors were going to do " national service" by writing off their investments to support the LNG hub initiative of some Minister or Ministers. Do they realize that many among the ranks of these investors are retirees or people who work their hearts out for many years to save that kind of money ?

Where is the "heartware" left in this country? They just don't care!


Food for thought?

Who are the sacrificial lambs in this episode? The total 50,000 retail investors of hyflux securities, who have partly done their "additional" national service to the country to help develop its ambitious LNG hub.

It is really ironic or in bad taste if Salim group is again going to win, at the expense of Singaporeans.

REJECT ANY UNFAIR SALIM PROPOSAL AT ALL COST!

I am too cheesed off to write further today!

 

[JustLikeThis]

In additional to Ed Chan, another few helpful gentlemen who bothered to share excellent insights this week about the nonsense that Hyflux investors faced.
Hope more affected investors will voice out in open platforms

Sias in its latest letter said there appeared to be "material faults and defects" in almost every Hyflux asset.
https://www.straitstimes.com/business/companies-markets/hyflux-queried-over-ceos-remuneration

Probe Hyflux's past operations
https://www.straitstimes.com/forum/letters-in-print/probe-hyfluxs-past-operations

In the light of the many unanswered questions, the relevant authorities should initiate an investigation into Hyflux's past operations and financial performance.

In addition, the restructuring process should not be allowed to proceed till the investigations are completed.

Vincent Khoo

 

[JustLikeThis]

In additional to Ed Chan, another few helpful gentlemen who bothered to share excellent insights this week about the nonsense that Hyflux investors faced.
Hope more affected investors will voice out in open platforms

Extracts from: https://www.straitstimes.com/forum/letters-in-print/expensive-lesson-for-hyflux-investors

While there are concerns over chief executive Olivia Lum's remuneration even as the firm was racking up debt and losses, could oversight by regulators and requirement for all bond offerings to be rated have contained Hyflux's implosion?

Will Singapore's reputation as a regulated and sound investment stronghold for safe and managed risk-taking enterprises suffer from a Hyflux blowout?
Wee Kwee Keng

 

[JustLikeThis]

you all have to help yourself first by voting for liquidation.

This is certain. It is like issuer frauded you and stole your money and then got the cheeks to ask you kym?

 

[JustLikeThis]

This song brings bad luck
See the male singer already died.

Ok this song is better for the investors

 

[Focus]

Hyflux is a strategic national asset that supplies Singapore with treated water. Singapore needs water more than it needs useless serfs. We can always replace sinkies, we couldn't replace Hyflux.

Sinkies need to look at the big picture instead of being myopic and fight over pennies. Hyflux must be saved!

 

[Focus]

so many foreigners screwing us now, listed company scandals, GST going up, HDB values dropping, army deaths, HIV scandal,

Worthwhile what, change the government who neither help Hyflux or punish the wrongdoers,
only know how to make money from own people.

Look at the contradicting policy of allowing Salim to buy Hyflux or China to participate in our water projects but Tuaspring can only be sold to Sembcorp or Keppel. PUAY BYE LAH

 

[JustLikeThis]

Latest Leaks from Bloomberg for restructuring proposal:

There is very little cash for every unsecured bankers, notesholders, perps & prefs ("Cash for Repayment"). Over 90% of the "Cash for Repayment" will be allocated to unsecured bankers and notesholders so that these "senior unsecured creditors" will support restructuring initiative.

There is almost nothing for perps & prefs because their voices can be ignored under Singapore's new debt laws as long as everyone else supports. Our Restructuring laws allow court to force-feed specific classes of investors when restructuring is supported by 75% of debt value and 50% of affected parties.

Please wait for the final confirmation but if the leak is true, Hyflux is not stupid, their strategy is to focus on Maybank and "senior unsecured creditors" and let retail investors bail out everyone.

Understand???


Warnings:
Perps and prefs are considered junior unsecured creditors. Hyflux's lawyers and auditors will argue that Perpetuals and Preference shares have no redemption date.

Situation 1:
Preference shareholders might not need to vote because technically, Hyflux only defaulted on perpetual bonds (redemption triggered due to last year's XD issue).

Situation 2:
Worse, if perpetual bond trustee don't pursue the default, then perpetual bondholders and preference shareholders need not vote because no redemption is triggered.

In Situation 1 & 2, it will be easier to cross the "75% of debt value and 50% of affected parties" threshold.
(It's like you study 9 subjects in O-Levels, but you just need L1R5 (six subjects). So in the end, you get 6 x Distinctions and 3 x F9-grades.
Perps and prefs will be graded F9. Many retired teachers holding hyflux, they will understand this analogy.

 

[Dr Christopher Cheok C S]

Please wait for the final confirmation but if the leak is true, Hyflux is not stupid, their strategy is to focus on Maybank and "senior unsecured creditors" and let retail investors bail out everyone.

Understand???

In Situation 1 & 2, it will be easier to cross the "75% of debt value and 50% of affected parties" threshold.
(It's like you study 9 subjects in O-Levels, but you just need L1R5 (six subjects). So in the end, you get 6 x Distinctions and 3 x F9-grades.
Perps and prefs will be graded F9. Many retired teachers holding hyflux, they will understand this analogy.

WTH, your analogy is very clear but tremendously cruel.

I couldn't find this thread for days, i thought it was censored.

 

[JustLikeThis]

I couldn't find this thread for days, i thought it was censored.

I shouldn't hog the prime-positions for our personal investment exposures. So i asked for the thread to be unpinned.

 

[JustLikeThis]

you all have to help yourself first by voting for liquidation.

Don't even need to vote now. Hyflux is focusing on some major creditors and I suspect they aim to either disqualify retail investors from voting as no redemption was triggered or even if retail investors vote NO, the overall plans will not be derailed.

Very shrewd.

 

[Empower]

Latest Leaks from Bloomberg for restructuring proposal:

There is very little cash for every unsecured bankers, notesholders, perps & prefs ("Cash for Repayment"). Over 90% of the "Cash for Repayment" will be allocated to unsecured bankers and notesholders so that these "senior unsecured creditors" will support restructuring initiative.

There is almost nothing for perps & prefs because their voices can be ignored under Singapore's new debt laws as long as everyone else supports. Our Restructuring laws allow court to force-feed specific classes of investors when restructuring is supported by 75% of debt value and 50% of affected parties.

Please wait for the final confirmation but if the leak is true, Hyflux is not stupid, their strategy is to focus on Maybank and "senior unsecured creditors" and let retail investors bail out everyone.

Understand???


Warnings:
Perps and prefs are considered junior unsecured creditors. Hyflux's lawyers and auditors will argue that Perpetuals and Preference shares have no redemption date.

Situation 1:
Preference shareholders might not need to vote because technically, Hyflux only defaulted on perpetual bonds (redemption triggered due to last year's XD issue).

Situation 2:
Worse, if perpetual bond trustee don't pursue the default, then perpetual bondholders and preference shareholders need not vote because no redemption is triggered.

In Situation 1 & 2, it will be easier to cross the "75% of debt value and 50% of affected parties" threshold.
(It's like you study 9 subjects in O-Levels, but you just need L1R5 (six subjects). So in the end, you get 6 x Distinctions and 3 x F9-grades.
Perps and prefs will be graded F9. Many retired teachers holding hyflux, they will understand this analogy.

Big brother, if the rumor is true. Can I clarify.................
No matter what retail investors vote, as long as the rest of the creditors approve the restructuring, then that is enough?

Imagine I owe 3 persons money, how can the law tell one of them that as long as the other two support me, I need not pay the third person.

What kind of kuku laws is that!

 

[JustLikeThis]

Big brother, if the rumor is true. Can I clarify.................
No matter what retail investors vote, as long as the rest of the creditors approve the restructuring, then that is enough?

Imagine I owe 3 persons money, how can the law tell one of them that as long as the other two support me, I need not pay the third person.

What kind of kuku laws is that!

Good morning, if you do some simple calculations based on Bloomberg's latest leak:
- Senior Unsecured Creditors get 10 times more cash than Junior Unsecured Creditors
-Senior Unsecured Creditors get AT LEAST 2 times more shares than Junior Unsecured Creditors

It's an absolute humiliation to the retail investors so I do not expect any support from Perps and Prefs. BUT EY is not stupid, so there must be some basis for their proposal.

Three Ways to do it:
- Find some legal technicality to exclude perfs and prefs from voting completely.
- Everyone agrees to restructuring except Perfs and Prefs (dissenting classes of creditors). Please refer to earlier L1R5 analogy.
- Argue that perps and prefs can only claim accrued, accumulated, unpaid coupons AND not par value since we don't have fixed redemption dates. Unpaid coupons will be neligible, compared to the overall recognized debts.

Then Perps and Prefs will be force-fed to surrender their stakes (for a token sum) and Singapore will be featured as a celebrated international debt restructuring hub.

 

[Soul]

 

[JustLikeThis]

Excellent piece from the gentlemen in the first post of this page-

Why Did So Many Singaporeans Invest in Hyflux - The Positive Image Illusion
https://sgdividends.blogspot.com/2019/02/why-did-so-many-singaporeans-invest-in.html

• Olivia nominated as member of the Corporate Governance Council of Singapore - playing an advisory role to MAS, ACRA and SGX
• Arguably Singapore's most celebrated female businesswoman
• A poster child for Enterprise Singapore, which is a combination of two government agencies - International Enterprise Singapore and Spring Singapore
• Hyflux featured in EDB ( Economic Development Board of Singapore) whose growth mirrors Singapore's water story
• Participating in many National Day Parades
• NEWater & Believing in the Singapore Water Story

It is a fact that many Merdeka and Pioneer Generations invested into Hyflux. These generations are the ones who saw through most of the ups and downs of Singapore development, from a swampy, forested area into the modern city we have now. They are the ones who faced the Konfrontasi with Malaysia and Indonesia, the ones who experienced first hand the separation of Singapore from Malaysia, the ones who experienced the racial riots and the ones who lived through the period where Singapore was threatened with water.

It is a fact that many of them can't read english and many are chinese educated. They didn't have much schooling like what the current generation is enjoying now. They grew up, believing in the Singapore story, believing in the vital importance of water to the very survival of Singapore. Without Water, there will be no Singapore.

It is utterly inconceivable to me that some people choose to label them as "greedy" investors and they deserve it for taking that risk. Many of them didn't buy shares. They bought the preference shares and the perpetual securities which came with a step-up date which many of them thought it refered to the redemption date, like the bond. They invested not so much on intellect but more on the emotional connection they have with the Singapore Story which they grew up with, and the trust in what they saw with their eyes. They believed in Olivia Lum, the one who was protrayed as one of the Heros of the Singapore Water Story, the one who built a Singapore company that we can be so proud of, the one who appeared so many times alongside the progress of the nation.

 

[AhMeng]

No vested interest in this saga. But all I want to say is no one pointed a gun at their heads to invest in this shit. So if they lose money, you can't blame the government. Just like if you love to gamble and buy 4d toto and casino, and you become penniless in future, it's your own decision to put in the money. Don't blame others. You can't always have the cake and eat it.

 

[JustLikeThis]

No vested interest in this saga. But all I want to say is no one pointed a gun at their heads to invest in this shit. So if they lose money, you can't blame the government. Just like if you love to gamble and buy 4d toto and casino, and you become penniless in future, it's your own decision to put in the money. Don't blame others. You can't always have the cake and eat it.

But at least regulators can arrest the wrong doers and address the policy failures?
- There are serious false-accountings involved, nobody arrested
- PUB stopped serious buyers just because they are from China, Malaysia and send Sembcorp and Keppel to low-ball at 1/3 of the value.
- Then now allowed indonesians to buy, and investors must write off over 90% of their capital. On the other hand, the chinese state-owned company offered close to full value.
For the rest, please read
Sias in its latest letter said there appeared to be "material faults and defects" in almost every Hyflux asset.
https://www.straitstimes.com/business/companies-markets/hyflux-queried-over-ceos-remuneration

 

[AhMeng]

But at least regulators can arrest the wrong doers and address the policy failures?
- There are serious false-accountings involved, nobody arrested
- PUB stopped serious buyers just because they are from China, Malaysia and send Sembcorp and Keppel to low-ball at 1/3 of the value.
- Then now allowed indonesians to buy, and investors must write off over 90% of their capital. On the other hand, the chinese state-owned company offered close to full value.
For the rest, please read
Sias in its latest letter said there appeared to be "material faults and defects" in almost every Hyflux asset.
https://www.straitstimes.com/business/companies-markets/hyflux-queried-over-ceos-remuneration

As the most junior investors, that's the nature of an investment. Sad to say. But it's life.

 

[rushifa666]

Excellent piece from the gentlemen in the first post of this page-

Why Did So Many Singaporeans Invest in Hyflux - The Positive Image Illusion
https://sgdividends.blogspot.com/2019/02/why-did-so-many-singaporeans-invest-in.html

• Olivia nominated as member of the Corporate Governance Council of Singapore - playing an advisory role to MAS, ACRA and SGX
• Arguably Singapore's most celebrated female businesswoman
• A poster child for Enterprise Singapore, which is a combination of two government agencies - International Enterprise Singapore and Spring Singapore
• Hyflux featured in EDB ( Economic Development Board of Singapore) whose growth mirrors Singapore's water story
• Participating in many National Day Parades
• NEWater & Believing in the Singapore Water Story

It is a fact that many Merdeka and Pioneer Generations invested into Hyflux. These generations are the ones who saw through most of the ups and downs of Singapore development, from a swampy, forested area into the modern city we have now. They are the ones who faced the Konfrontasi with Malaysia and Indonesia, the ones who experienced first hand the separation of Singapore from Malaysia, the ones who experienced the racial riots and the ones who lived through the period where Singapore was threatened with water.

It is a fact that many of them can't read english and many are chinese educated. They didn't have much schooling like what the current generation is enjoying now. They grew up, believing in the Singapore story, believing in the vital importance of water to the very survival of Singapore. Without Water, there will be no Singapore.

It is utterly inconceivable to me that some people choose to label them as "greedy" investors and they deserve it for taking that risk. Many of them didn't buy shares. They bought the preference shares and the perpetual securities which came with a step-up date which many of them thought it refered to the redemption date, like the bond. They invested not so much on intellect but more on the emotional connection they have with the Singapore Story which they grew up with, and the trust in what they saw with their eyes. They believed in Olivia Lum, the one who was protrayed as one of the Heros of the Singapore Water Story, the one who built a Singapore company that we can be so proud of, the one who appeared so many times alongside the progress of the nation.

Because stupid is as stupid does? There were so many chances to bail. They just let the losses spiral

 

[gummybear]

But at least regulators can arrest the wrong doers and address the policy failures?
- There are serious false-accountings involved, nobody arrested
- PUB stopped serious buyers just because they are from China, Malaysia and send Sembcorp and Keppel to low-ball at 1/3 of the value.
- Then now allowed indonesians to buy, and investors must write off over 90% of their capital. On the other hand, the chinese state-owned company offered close to full value.
For the rest, please read
Sias in its latest letter said there appeared to be "material faults and defects" in almost every Hyflux asset.
https://www.straitstimes.com/business/companies-markets/hyflux-queried-over-ceos-remuneration

Got news said China state owned company wanted to buy meh ?