Hyflux gets 2-month reprieve, in talks with more investors
Hyflux had asked for a four-month extension on its debt moratorium, saying it was in discussions with other potential investors. ST FILE PHOTO
The High Court yesterday allowed debt-ridden water treatment firm Hyflux two more months of reprieve from its creditors - until Aug 2 - as the company continues to work with several investors to nail down a new restructuring plan.
Hyflux had asked for a four-month extension on its debt moratorium, saying it was in discussions with other potential investors.
This was in addition to talks with United Arab Emirates utility Utico for a $400 million investment and Mauritius-based investment fund Oyster Bay Fund for up to $500 million. A third potential investor, said to be a large desalination company, had issued a letter of interest for certain assets in Algeria, Oman, the Middle East and North Africa.
Four more companies were also in discussions over a potential investment. They were a large power sector player in Asia looking to merge with Hyflux group, a fund whose corporate strategy included turning around distressed firms, a major Asia-based nuclear and civil engineering contractor, and a major waste treatment player.
The company said it hopes to select an investor by mid-June. Utico has informed Hyflux that it wants a binding agreement signed by June 17, while Oyster Bay is in advanced talks on a binding agreement.
While Justice Aedit Abdullah said he was "concerned about giving a four-month (extension) at a go", he told Hyflux to "assure the investors I will be amenable, if progress continues to be made, to a further two-month extension" beyond Aug 2.
"As I have indicated previously, the position now is different from when the application (for moratorium) was first made. Therefore, any extensions will be much more controlled," he added.
The order was passed as an earlier court-sanctioned protection from creditors expired yesterday.
Court dismisses application from seven unsecured banks to be carved out of Hyflux debt moratorium
SINGAPORE: The Singapore High Court on Tuesday (May 7) denied a group of seven unsecured banks the go-ahead to be carved out of the debt moratorium to file an application to have Hyflux and Hydrochem placed under judicial management.
The court cited that Hyflux made a credible case by saying that granting the carve-out would have an adverse impact on the company’s restructuring efforts and ongoing projects.
The group – comprising Mizuho Bank, KfW IPEX-Bank, Bangkok Bank, BNP Paribas, CTBC Bank, The Korea Development Bank and the Korea Development Bank, Singapore Branch – is collectively owed a total of S$648.7 million.
However, Justice Aedit Abdullah said the unsecured banks are given the liberty to file the application again, based on the progress of Hyflux’s restructuring process and the fact that “things can change”.
He added that he would “leave the sword hanging above Hyflux’s head” and keep the company on a tight leash.
The High Court also granted the company a five-day extension on its debt moratorium, originally set for May 24.
Hyflux will be able to apply for a further extension to the court-sanctioned protection from creditors when it appears before the court on May 29.
In the meantime, Hyflux will have to file an affidavit by May 24 to provide an update on the restructuring process.
Full story at https://www.channelnewsasia.com/news/business/court-dismisses-carve-out-hyflux-hydrochem-debt-moratorium-11511730
Olivia Lum earned enough already, will be paid only $1 a year from now on hah.
Hyflux boss will now get just $1 a year
The highly paid boss of Hyflux will now get just $1 a year as she tries to save the debt-laden water treatment company.
Chief executive Olivia Lum made the disclosure in an affidavit yesterday, the same day the firm announced that a new white-knight has appeared on the horizon bearing a possible $400 million lifeline.
Ms Lum stated: "I have decided that henceforth, I will only draw a nominal $1 annual salary until Hyflux is successfully restructured."
She added that the board has agreed that no director fees will be proposed at the next annual general meeting.
Ms Lum's hefty compensation over the years has been a sticking point with some investors.
The Securities Investor Association (Singapore) or Sias flagged earlier this year that she had reaped more than $60 million in dividends "in the time that shareholders and bond holders have seen their entire investment destroyed".
In 2017, when Hyflux reported losses of $115.6 million, Ms Lum received between $750,000 and $1 million in salary, benefits and bonuses, Sias noted.
Ms Lum's move yesterday was a small part of a wider development that could see a new deep-pocketed investor come on board.
Hyflux described the potential investor as a developer and owner of water and power utilities based in the Middle East with a reputable track record, but its exchange filing yesterday did not identify the firm.
The money will be used for equity and working capital and possible urgent interim funding, the filing noted, adding that the potential investor has issued Hyflux with a non-binding letter of intent.
More at https://www.tnp.sg/news/business/hyflux-boss-will-now-get-just-1-year
Hyflux sues SM Investments for repudiation of rescue deal
SINGAPORE: More than a week after scrapping a key rescue deal with Indonesia’s SM Investments, Hyflux said on Monday (Apr 15) it is suing its would-be white knight.
In a statement, Hyflux said it has filed a writ of summons in the Singapore High Court “to commence an action against the investor for repudiation of the restructuring agreement”, as well as to claim a S$38.9 million deposit.
Hyflux has previously asserted its right to lay claim to this deposit, which was placed into escrow shortly after the execution of the restructuring deal, should SM Investments “wrongfully terminate” the pact.
The statement noted that SM Investments "has denied that it has repudiated the restructuring agreement” inked last October.
Hyflux said it will provide further updates as and when there are further material developments.
Knee deep in debt, the former star company sought court protection to reorganise its debts last May. By October, it found a white knight in SM Investments, which said it would invest S$530 million in exchange for a 60 per cent stake.
However, cracks in the partnership started to surface by mid-March when the Indonesian consortium said it could walk away from the deal after Hyflux's subsidiary was slapped with a default notice from PUB.
Later that month, it hit out at the Singapore company again over information disclosures and another alleged default at Hyflux's Magtaa desalination plant in Algeria.
With just weeks to go before its court-approved debt moratorium expires at the end of this month, Hyflux on Apr 4 terminated the restructuring agreement, citing that it has “no confidence” in SM Investments to complete the deal.
"Regrettably, the investor has declined to provide the company with such written confirmation that it will proceed to complete the proposed SMI Investment if the outstanding conditions are met," Hyflux had said earlier this month in terminating the deal.
Read more at https://www.channelnewsasia.com/news/business/hyflux-sues-sm-investments-for-repudiation-of-rescue-deal-11447046
The SG President = a useless old flower vase in our jurisdiction who is absolutely good for nothing save for endorsing Milo products, yawning at charity shows, performing gardening duties in the Istana and praising the RSN.
How dare them brainless, greedy Hyflux investors demand that the government come to their rescue? They deserve to be fleeced big time for their sheer stupidity.
These morons were obviously living in their mothers' wombs all this while; besides, since they are PAP supporters shouldn't they swallow the "'You die your own business" mantra espoused by the Monkeys In White wholesale however hard it may seem? Move on yo, an "honest mistake" was committed after all.
If you really can't move on, there's always Bedok Reservoir you can visit to end all the misery.
Someone has initiated a petition requesting #notmypresident to
appoint a commission of inquiry on Hyflux saga lol.
The downfall of Hyflux has caused major suffering to many Singaporean investors who had invested their hard earned money in issued preferential shares and perpetual securities.
A total of 34,000 retail investors had invested $900 million in these securities.
A big portion of the investments were made in May 2016 based on a prospectus issued by the issue manager, DBS.
Most of the retail investors who bought the perpetual securities in 2016 were risk averse and non sophisticated investors. They chose to invest in the perpetual securities as they wish to avoid investing in the shares (which they consider to be riskier).
They bought the perpetual securities in Hyflux as it operated water desalination plants that were considered to be strategic to Singapore.
The investors also thought that the securities were safe as they had been vetted by the Monetary Authority of Singapore and subsequently approved for sale through the ATM machines of DBS Bank.
On 8 April 2019, the Monetary Authority of Singapore issued a statement indicating that they had investigated matters and found that DBS did not commit any impropriety in the May 2016 sale of the $500 million Hyflux perpetual securities.
It found that Hyflux had disclosed in its offering document in 2016 that the Tuaspring power plant was expected to incur losses if electricity prices in Singapore were to remain low. The offering document was also cautious on the outlook for the water and energy markets.
We are unhappy with the findings of MAS. They did not take into account the following facts that become clear to retail investors only recently:
a) It should have been quite clear to the board of Hyflux about the extent of the loss that the power plant was incurring at that time. They had already committed to the purchase of the LNG gas at a possibly high price and wholesale electricity prices had dropped to disastrous levels.
b) The monthly losses from the power plant must be of a large magnitude. The board did not appear to indicate the seriousness of this situation in the prospectus. Were the directors hoping that wholesale electricity prices would recover? Surely, this point should be clearly mentioned in the prospectus by the board of Hyflux and by the issue manager?
c) Furthermore, there was no mention that most of the revenue of Tuaspring came from the power plant. In the annual report of Hyflux for 2011 to 2016, Tuaspring was pitched as a desalination plant and the power component was built with the objective to supply electricity to the water plant, with excesses generated sold to the national grid. Most people had the impression that water was the main revenue generator.
d) The board of Hyflux had broken a rule in the SGX listing where they are required to obtain a shareholder mandate when they embark on new business ventures (i.e. power generation) which could possibly augment the overall risk profile. They did not inform shareholders accordingly.
e) Within just two years of the issue of the perpetual securities in 2016, Hyflux had to apply for court protection from its creditors due to massive losses incurred.
There is a potential conflict of interest in the findings made by MAS. If they stated that there was impropriety, some people could have questioned their role in allowing the perpetual securities to be sold to retail investors.
To protect the integrity of our Singapore financial hub and to dispel any doubt about the findings made by MAS, we call on the President of Singapore to appoint a commission of inquiry to undertake an independent review of this matter. This review should cover the question of whether the board of directors of Hyflux, the issue manager DBS and the auditors KPMG had disclosed, as they should, the actual facts known to them about the financial situation of Hyflux when they issued the prospectus in 2016 for sale of the $500 million perpetual securities to the retail investors.
It should also study whether MAS had carried out its duty appropriately in approving the securities for sale to retail investors.
We also suggest that the commission of inquiry should look into the part played by the EMA (Energy Market Authority) in issuing new vesting contracts that expanded existing capacity to almost twice that of actual demand, thereby causing wholesale electricity prices to crash.
If the actions of EMA had been unwise and had caused Hyflux to incur severe losses, should the government compensate Hyflux and its investors for these losses?
As 34,000 retail investors face the shocking prospect of an aggregate loss to the tune of $900 million no thansk to their investments in Hyflux, it is important that steps be taken to demonstrate that their interests have been fairly looked after.
We call on the President of Singapore to appoint an independent commission of inquiry to look into this matter.
SINGAPORE - The Monetary Authority of Singapore said on Monday morning (April 8) that its supervisory reviews to date have not uncovered any impropriety on the part of DBS in performing its roles as both issue manager and distributor of Hyflux perpetual securities in 2016.
DBS was the sole lead manager and bookrunner of Hyflux's issue of $500 million, 6 per cent perpetual securities on May 27, 2016.
The issue was for the purpose of redeeming the $475 million perpetual securities earlier issued to accredited investors. In view of strong interest from retail investors, the size of the public offer was increased from $115 million to $329 million. Hyflux's directors, management and employees were allocated $6 million and the remaining $165 million placed out.
The Straits Times understands that MAS was responding to queries Bloomberg had made in relation to a letter by Mr Leong Mun Wai published on March 26 in The Business Times.
In the letter, Mr Leong had said that "financial analysts of the financial institutions who sold the perpetual securities should have anticipated the financial risks to unsophisticated CPF investors when the securities were issued in 2016, because by then, the electricity price had collapsed."
Mr Leong also said that "The Monetary Authority of Singapore should look into the financial analyses and selling processes of the financial institutions and ask why they chose to sell the new issue to unsophisticated investors when the financial health of Hyflux had deteriorated in 2016 compared to 2014."
Hyflux saga: Acra to assess if further action needed
For a decade, audit firm KPMG had stamped Hyflux's annual reports with a clean bill of health, attesting to the water treatment company's ability to continue to operate.
But with the company now facing the possibility of liquidation after a scuppered restructuring deal on Thursday, its shareholders and investors are asking why auditors failed to flag the risk of Hyflux spiralling into heavy debt.
This might well be a key question on the minds of Singapore's accounting and auditing regulator, which told The Straits Times that it is monitoring the Hyflux quagmire closely.
The Accounting and Corporate Regulatory Authority (Acra), which enforces Singapore's strict auditing and accounting laws and standards, said in a statement that it will also "assess if further action is warranted". The Acra spokesman did not elaborate further.
Acra's statement came a day before the restructuring agreement between Hyflux and SM Investments collapsed on Thursday, with both parties laying the blame on the other side for the demise of the $530 million deal.
As a result, the scheme meetings that were supposed to be held yesterday were also cancelled, and the day passed without any pronouncements from either side.
Acra now joins a trio of financial regulators - including the Monetary Authority of Singapore and the Singapore Exchange - which have publicly said they are keeping a close watch on affairs.
Corporate governance experts believe the accounting and auditing issue is likely to centre on Hyflux's 2017 books, which the company released in March last year and carry the unqualified opinion of the auditors. It had slipped into the red for the first time in 2017 since its listing in 2001.
Yet two months later in May, Hyflux shocked investors when it filed for bankruptcy protection.
Its financial statements were prepared on the basis of going concern - an accounting method that assumes the company will remain solvent and operational indefinitely until proven otherwise.
According to Singapore's auditing standards, auditors are duty-bound to question this assumption, assessing any risks to the company's ability to stay afloat and avoid bankruptcy. They are also required to remain alert to any events or conditions that show otherwise.
Hyflux, in response to queries from the Securities Investors Association (Singapore) in February, told the watchdog there were no events to cast significant doubt on the assumption of going concern.
National University of Singapore associate professor of accounting Mak Yuen Teen said that if auditors had given an adverse opinion, ordinary shareholders and creditors could have chosen to get out earlier.
He noted that there were no separate audited statements for the group's loss-making subsidiary Tuaspring for 2017.
More at https://www.straitstimes.com/business/acra-to-assess-if-further-action-needed
Hyflux says Salim-Medco rescue is off; both sides play the blame game
HYFLUX said on Thursday that a key rescue deal from the Salim-Medco group is officially off, with just weeks to go before the water and power plant company loses court protection from creditors.
Hyflux has cancelled scheme meetings scheduled for April 5 and 8. There is also no need for shareholders to attend an extraordinary general meeting scheduled for April 15, the company said.
Now both sides are arguing over who killed the deal. The answer may determine who gets to pocket the S$38.9 million deposit that Salim-Medco (SMI) put into escrow last year, upon agreeing to play white knight for Hyflux.
Reacting to Hyflux's announcement on Thursday, SMI, led by Indonesian billionaire Anthoni Salim, said it was "surprised" by Hyflux's "purported termination" of the rescue deal, and will be taking legal advice in relation to Hyflux's action.
In a late Thursday night filing, Hyflux said it wrote to the investor to request a clear and unequivocal written confirmation of its commitment, and stated clearly that the company would have no choice but to terminate the restructuring agreement if the investor declined to do so.
"Regrettably, the investor, in a letter from its lawyers dated 4 April 2019, declined to provide the written confirmation sought," Hyflux added.
Salim-Medco was supposed to invest S$530 million into Hyflux in exchange for a 60 per cent stake once Hyflux's debts had been cleared, an investment that formed a key pillar in Hyflux's restructuring plans.
But SMI had a change of heart in recent weeks, citing concerns about Hyflux's working capital requirements and the cash distribution plan under the proposed restructuring.
On Thursday, Hyflux said it had tried to meaningfully engage with the Indonesian investor group on multiple occasions: "However, in light of the investor's responses and conduct, the company has no confidence that the investor is prepared to continue to complete the proposed investment."
It added: "They have also not refuted the statements in the media that SMI was 'slated to walk away' from the deal. Without the confirmation from SMI to dispel the overhanging uncertainty over this deal, it would not be possible for the stakeholders to have a proper vote."
Effectively, Salim-Medco has repudiated the restructuring agreement and Hyflux has accepted its repudiation, the Singapore company said.
"The restructuring agreement is therefore terminated," Hyflux stated.
More at https://www.businesstimes.com.sg/companies-markets/hyflux-says-salim-medco-rescue-is-off-both-sides-play-the-blame-game-0
Among them was 67-year-old retiree Koh Ah Kiw, who lost about $40,000 after investing in Hyflux preference shares and perpetual securities to "get pocket money for retirement". She said she bought the shares at $100 apiece and had been receiving dividends until they stopped last year.
Madam Koh, who was with the Ministry of Health for more than 42 years, said: "My daughter said I'm unlucky. I also lost my $30,000 investment in Lehman Minibonds."
Madam L.L. Hong, 53, and her husband, Mr B.C. Ong, 55, said they bought Hyflux perpetual securities and preference shares because they thought Tuaspring was a "strategic national asset".
Instead, they have lost more than $200,000 of their retirement funds.
PUB accedes to Tuaspring’s request to extend default notice period
NATIONAL water agency PUB said on Friday that it has acceded to Hyflux subsidiary Tuaspring Pte Ltd's request for more time to cure its defaults.
The default notice period has been extended to April 30, subject to conditions, instead of April 5.
PUB said that Tuaspring Pte Ltd (TPL) had on Wednesday requested for the deadline to be pushed out to the end of April.
It said in a statement on Friday: "TPL noted that it is currently loss-making and will require financial support from Hyflux. However, Hyflux's ability to provide financial support to TPL will depend on whether it is able to complete its restructuring and to obtain the investment from SM Investments."
SM Investments (SMI) is the Indonesian investor group led by billionaire Anthoni Salim that had agreed in October last year to give Hyflux a S$530 million lifeline in exchange for a controlling stake in the company once all its debts are settled.
Hyflux creditors are scheduled to vote on this rescue plan on April 5, although SMI said on Thursday that the deal no longer has its endorsement.
One of the main points of dispute arose from PUB's default notice. On March 5, PUB served a default notice to TPL, seeking remedy for both operational and financial defaults.
SMI has taken the position that PUB's default notice constitutes a "prescribed occurrence" that allows it to call off the rescue deal.
On the other hand, Hyflux has argued that a prescribed occurrence would take place only if PUB terminates its water-purchase agreement (WPA) with the Tuaspring water desalination plant. Such an event has not yet taken place, and the earliest that PUB can exercise its right to terminate the water contract – if Tuaspring's defaults were not remedied – was on April 6, Hyflux said. (With the extension, that date is now May 1).
Now that PUB has agreed to give TPL more time to cure its defaults, the ball is in SMI's court.
Wah this Hyflux is machiam a cat with 9 lives just won't die......
Hyflux gets 2-month reprieve, in talks with more investors
Hyflux had asked for a four-month extension on its debt moratorium, saying it was in discussions with other potential investors. ST FILE PHOTO
The High Court yesterday allowed debt-ridden water treatment firm Hyflux two more months of reprieve from its creditors - until Aug 2 - as the company continues to work with several investors to nail down a new restructuring plan.
Hyflux had asked for a four-month extension on its debt moratorium, saying it was in discussions with other potential investors.
This was in addition to talks with United Arab Emirates utility Utico for a $400 million investment and Mauritius-based investment fund Oyster Bay Fund for up to $500 million. A third potential investor, said to be a large desalination company, had issued a letter of interest for certain assets in Algeria, Oman, the Middle East and North Africa.
Four more companies were also in discussions over a potential investment. They were a large power sector player in Asia looking to merge with Hyflux group, a fund whose corporate strategy included turning around distressed firms, a major Asia-based nuclear and civil engineering contractor, and a major waste treatment player.
The company said it hopes to select an investor by mid-June. Utico has informed Hyflux that it wants a binding agreement signed by June 17, while Oyster Bay is in advanced talks on a binding agreement.
While Justice Aedit Abdullah said he was "concerned about giving a four-month (extension) at a go", he told Hyflux to "assure the investors I will be amenable, if progress continues to be made, to a further two-month extension" beyond Aug 2.
"As I have indicated previously, the position now is different from when the application (for moratorium) was first made. Therefore, any extensions will be much more controlled," he added.
The order was passed as an earlier court-sanctioned protection from creditors expired yesterday.
Full story at https://www.straitstimes.com/business/hyflux-gets-2-month-reprieve-in-talks-with-more-investors
Court dismisses application from seven unsecured banks to be carved out of Hyflux debt moratorium
SINGAPORE: The Singapore High Court on Tuesday (May 7) denied a group of seven unsecured banks the go-ahead to be carved out of the debt moratorium to file an application to have Hyflux and Hydrochem placed under judicial management.
The court cited that Hyflux made a credible case by saying that granting the carve-out would have an adverse impact on the company’s restructuring efforts and ongoing projects.
The group – comprising Mizuho Bank, KfW IPEX-Bank, Bangkok Bank, BNP Paribas, CTBC Bank, The Korea Development Bank and the Korea Development Bank, Singapore Branch – is collectively owed a total of S$648.7 million.
However, Justice Aedit Abdullah said the unsecured banks are given the liberty to file the application again, based on the progress of Hyflux’s restructuring process and the fact that “things can change”.
He added that he would “leave the sword hanging above Hyflux’s head” and keep the company on a tight leash.
The High Court also granted the company a five-day extension on its debt moratorium, originally set for May 24.
Hyflux will be able to apply for a further extension to the court-sanctioned protection from creditors when it appears before the court on May 29.
In the meantime, Hyflux will have to file an affidavit by May 24 to provide an update on the restructuring process.
Full story at https://www.channelnewsasia.com/news/business/court-dismisses-carve-out-hyflux-hydrochem-debt-moratorium-11511730
Anyways Hyflux has a new white knight coming to the rescue it appears:
https://www.straitstimes.com/business/hyflux-mystery-white-knight-is-uaes-utico
Some more...........
Leaks from Telegram chat:
Olivia Lum earned enough already, will be paid only $1 a year from now on hah.
Hyflux boss will now get just $1 a year
The highly paid boss of Hyflux will now get just $1 a year as she tries to save the debt-laden water treatment company.
Chief executive Olivia Lum made the disclosure in an affidavit yesterday, the same day the firm announced that a new white-knight has appeared on the horizon bearing a possible $400 million lifeline.
She added that the board has agreed that no director fees will be proposed at the next annual general meeting.
Ms Lum's hefty compensation over the years has been a sticking point with some investors.
The Securities Investor Association (Singapore) or Sias flagged earlier this year that she had reaped more than $60 million in dividends "in the time that shareholders and bond holders have seen their entire investment destroyed".
In 2017, when Hyflux reported losses of $115.6 million, Ms Lum received between $750,000 and $1 million in salary, benefits and bonuses, Sias noted.
Ms Lum's move yesterday was a small part of a wider development that could see a new deep-pocketed investor come on board.
Hyflux described the potential investor as a developer and owner of water and power utilities based in the Middle East with a reputable track record, but its exchange filing yesterday did not identify the firm.
The money will be used for equity and working capital and possible urgent interim funding, the filing noted, adding that the potential investor has issued Hyflux with a non-binding letter of intent.
More at https://www.tnp.sg/news/business/hyflux-boss-will-now-get-just-1-year
Meanwhile dishonourable son and Ho Jinx remain absolutely silent on the Hyflux saga.......too busy playing with their grandchild?
PUB & Maybank fighting for Hyflux's Tuaspring assets...........
(早报讯）凯发（Hyflux）于今天（4月19日）凌晨发出文告说，公司和旗下的大泉水电厂（Tuaspring）接获马来亚银行（Maybank）的一封信，表示立即终止合作协议。马来亚银行也表示有意委任接管人，接管大泉的资产，这不包括大泉海水淡化厂和共用的基础设施。
马来亚银行是大泉水电厂的唯一有抵押债权人。
文告指出，马来亚银行终止协议的原因是经过多次延后截止期限，凯发至今仍未为水电厂找到买家，这已经构成违约。马来亚银行可行使权利，终止协议。
文告也说，根据马来亚银行与公用事业局和大泉水电厂于2013年11月签署的直接协议，公司已收到马来亚银行向公用局和能源市场管理局发出的通知。通知内容与大泉水电厂的欠款有关以及马来亚银行表示将委任接管人，接管大泉的资产，但不包括水厂和共用设施。
在这段期间，大泉的电厂将正常运作。
https://www.zaobao.com.sg/zfinance/realtime/story20190419-949911
PUB issues termination notice to Tuaspring!!!!!!!!
https://www.channelnewsasia.com/news/singapore/pub-tuaspring-desalination-plant-termination-notice-11453930
Olivia Lum wanted to clean up the rivers in Asia woah....LMFAO now Hyflux is getting cleaned up until nothing is left.
PUB is confiscating Tuas Spring on 30 April correct?
Miss Lum sure has gotten her priorities all mixed up.
Her company already knee deep in shit and she is still in the mood to go fight a huge legal battle? Well done lah Olivia.
Hyflux sues SM Investments for repudiation of rescue deal
SINGAPORE: More than a week after scrapping a key rescue deal with Indonesia’s SM Investments, Hyflux said on Monday (Apr 15) it is suing its would-be white knight.
In a statement, Hyflux said it has filed a writ of summons in the Singapore High Court “to commence an action against the investor for repudiation of the restructuring agreement”, as well as to claim a S$38.9 million deposit.
Hyflux has previously asserted its right to lay claim to this deposit, which was placed into escrow shortly after the execution of the restructuring deal, should SM Investments “wrongfully terminate” the pact.
The statement noted that SM Investments "has denied that it has repudiated the restructuring agreement” inked last October.
Hyflux said it will provide further updates as and when there are further material developments.
Knee deep in debt, the former star company sought court protection to reorganise its debts last May. By October, it found a white knight in SM Investments, which said it would invest S$530 million in exchange for a 60 per cent stake.
However, cracks in the partnership started to surface by mid-March when the Indonesian consortium said it could walk away from the deal after Hyflux's subsidiary was slapped with a default notice from PUB.
Later that month, it hit out at the Singapore company again over information disclosures and another alleged default at Hyflux's Magtaa desalination plant in Algeria.
With just weeks to go before its court-approved debt moratorium expires at the end of this month, Hyflux on Apr 4 terminated the restructuring agreement, citing that it has “no confidence” in SM Investments to complete the deal.
"Regrettably, the investor has declined to provide the company with such written confirmation that it will proceed to complete the proposed SMI Investment if the outstanding conditions are met," Hyflux had said earlier this month in terminating the deal.
Read more at https://www.channelnewsasia.com/news/business/hyflux-sues-sm-investments-for-repudiation-of-rescue-deal-11447046
The SG President = a useless old flower vase in our jurisdiction who is absolutely good for nothing save for endorsing Milo products, yawning at charity shows, performing gardening duties in the Istana and praising the RSN.
How dare them brainless, greedy Hyflux investors demand that the government come to their rescue? They deserve to be fleeced big time for their sheer stupidity.
These morons were obviously living in their mothers' wombs all this while; besides, since they are PAP supporters shouldn't they swallow the "'You die your own business" mantra espoused by the Monkeys In White wholesale however hard it may seem? Move on yo, an "honest mistake" was committed after all.
If you really can't move on, there's always Bedok Reservoir you can visit to end all the misery.
Won't be signing this shit, moi want to watch all these kum gong Sinkies crash and burn big time.
PS: HaLEEmah is busy preparing Nasi Lemak in the Istana kitchen, please don't disturb her.
Someone has initiated a petition requesting #notmypresident to
appoint a commission of inquiry on Hyflux saga lol.
The downfall of Hyflux has caused major suffering to many Singaporean investors who had invested their hard earned money in issued preferential shares and perpetual securities.
A total of 34,000 retail investors had invested $900 million in these securities.
A big portion of the investments were made in May 2016 based on a prospectus issued by the issue manager, DBS.
Most of the retail investors who bought the perpetual securities in 2016 were risk averse and non sophisticated investors. They chose to invest in the perpetual securities as they wish to avoid investing in the shares (which they consider to be riskier).
They bought the perpetual securities in Hyflux as it operated water desalination plants that were considered to be strategic to Singapore.
The investors also thought that the securities were safe as they had been vetted by the Monetary Authority of Singapore and subsequently approved for sale through the ATM machines of DBS Bank.
On 8 April 2019, the Monetary Authority of Singapore issued a statement indicating that they had investigated matters and found that DBS did not commit any impropriety in the May 2016 sale of the $500 million Hyflux perpetual securities.
It found that Hyflux had disclosed in its offering document in 2016 that the Tuaspring power plant was expected to incur losses if electricity prices in Singapore were to remain low. The offering document was also cautious on the outlook for the water and energy markets.
We are unhappy with the findings of MAS. They did not take into account the following facts that become clear to retail investors only recently:
a) It should have been quite clear to the board of Hyflux about the extent of the loss that the power plant was incurring at that time. They had already committed to the purchase of the LNG gas at a possibly high price and wholesale electricity prices had dropped to disastrous levels.
b) The monthly losses from the power plant must be of a large magnitude. The board did not appear to indicate the seriousness of this situation in the prospectus. Were the directors hoping that wholesale electricity prices would recover? Surely, this point should be clearly mentioned in the prospectus by the board of Hyflux and by the issue manager?
c) Furthermore, there was no mention that most of the revenue of Tuaspring came from the power plant. In the annual report of Hyflux for 2011 to 2016, Tuaspring was pitched as a desalination plant and the power component was built with the objective to supply electricity to the water plant, with excesses generated sold to the national grid. Most people had the impression that water was the main revenue generator.
d) The board of Hyflux had broken a rule in the SGX listing where they are required to obtain a shareholder mandate when they embark on new business ventures (i.e. power generation) which could possibly augment the overall risk profile. They did not inform shareholders accordingly.
e) Within just two years of the issue of the perpetual securities in 2016, Hyflux had to apply for court protection from its creditors due to massive losses incurred.
There is a potential conflict of interest in the findings made by MAS. If they stated that there was impropriety, some people could have questioned their role in allowing the perpetual securities to be sold to retail investors.
To protect the integrity of our Singapore financial hub and to dispel any doubt about the findings made by MAS, we call on the President of Singapore to appoint a commission of inquiry to undertake an independent review of this matter. This review should cover the question of whether the board of directors of Hyflux, the issue manager DBS and the auditors KPMG had disclosed, as they should, the actual facts known to them about the financial situation of Hyflux when they issued the prospectus in 2016 for sale of the $500 million perpetual securities to the retail investors.
It should also study whether MAS had carried out its duty appropriately in approving the securities for sale to retail investors.
We also suggest that the commission of inquiry should look into the part played by the EMA (Energy Market Authority) in issuing new vesting contracts that expanded existing capacity to almost twice that of actual demand, thereby causing wholesale electricity prices to crash.
If the actions of EMA had been unwise and had caused Hyflux to incur severe losses, should the government compensate Hyflux and its investors for these losses?
As 34,000 retail investors face the shocking prospect of an aggregate loss to the tune of $900 million no thansk to their investments in Hyflux, it is important that steps be taken to demonstrate that their interests have been fairly looked after.
We call on the President of Singapore to appoint an independent commission of inquiry to look into this matter.
https://www.change.org/p/halimah-yacob-president-of-singapore-request-halimah-president-of-singapore-to-appoint-a-commission-of-inquiry-on-hyflux-saga?recruiter=45758466
Moi can have a good night's sleep thanks to Miss Kitty Chia hur hur hur
Oh.......forgot to say thank you to Alice Chong LMFAO for making me smile so wide.
WTF........zero accountability.
Ownself clear ownself: MAS says DBS was above proper in handling sales of Hyflux perpetual securities in 2016
https://www.straitstimes.com/business/companies-markets/hyflux-mas-clears-dbs-of-impropriety-in-may-2016-sale-of-500m-in
DBS was the sole lead manager and bookrunner of Hyflux's issue of $500 million, 6 per cent perpetual securities on May 27, 2016.
The issue was for the purpose of redeeming the $475 million perpetual securities earlier issued to accredited investors. In view of strong interest from retail investors, the size of the public offer was increased from $115 million to $329 million. Hyflux's directors, management and employees were allocated $6 million and the remaining $165 million placed out.
The Straits Times understands that MAS was responding to queries Bloomberg had made in relation to a letter by Mr Leong Mun Wai published on March 26 in The Business Times.
In the letter, Mr Leong had said that "financial analysts of the financial institutions who sold the perpetual securities should have anticipated the financial risks to unsophisticated CPF investors when the securities were issued in 2016, because by then, the electricity price had collapsed."
Mr Leong also said that "The Monetary Authority of Singapore should look into the financial analyses and selling processes of the financial institutions and ask why they chose to sell the new issue to unsophisticated investors when the financial health of Hyflux had deteriorated in 2016 compared to 2014."
The tragedy that is Hyflux:
Hyflux saga: Acra to assess if further action needed
For a decade, audit firm KPMG had stamped Hyflux's annual reports with a clean bill of health, attesting to the water treatment company's ability to continue to operate.
But with the company now facing the possibility of liquidation after a scuppered restructuring deal on Thursday, its shareholders and investors are asking why auditors failed to flag the risk of Hyflux spiralling into heavy debt.
This might well be a key question on the minds of Singapore's accounting and auditing regulator, which told The Straits Times that it is monitoring the Hyflux quagmire closely.
The Accounting and Corporate Regulatory Authority (Acra), which enforces Singapore's strict auditing and accounting laws and standards, said in a statement that it will also "assess if further action is warranted". The Acra spokesman did not elaborate further.
Acra's statement came a day before the restructuring agreement between Hyflux and SM Investments collapsed on Thursday, with both parties laying the blame on the other side for the demise of the $530 million deal.
As a result, the scheme meetings that were supposed to be held yesterday were also cancelled, and the day passed without any pronouncements from either side.
Acra now joins a trio of financial regulators - including the Monetary Authority of Singapore and the Singapore Exchange - which have publicly said they are keeping a close watch on affairs.
Corporate governance experts believe the accounting and auditing issue is likely to centre on Hyflux's 2017 books, which the company released in March last year and carry the unqualified opinion of the auditors. It had slipped into the red for the first time in 2017 since its listing in 2001.
Yet two months later in May, Hyflux shocked investors when it filed for bankruptcy protection.
Its financial statements were prepared on the basis of going concern - an accounting method that assumes the company will remain solvent and operational indefinitely until proven otherwise.
According to Singapore's auditing standards, auditors are duty-bound to question this assumption, assessing any risks to the company's ability to stay afloat and avoid bankruptcy. They are also required to remain alert to any events or conditions that show otherwise.
Hyflux, in response to queries from the Securities Investors Association (Singapore) in February, told the watchdog there were no events to cast significant doubt on the assumption of going concern.
National University of Singapore associate professor of accounting Mak Yuen Teen said that if auditors had given an adverse opinion, ordinary shareholders and creditors could have chosen to get out earlier.
He noted that there were no separate audited statements for the group's loss-making subsidiary Tuaspring for 2017.
More at https://www.straitstimes.com/business/acra-to-assess-if-further-action-needed
Hyflux says Salim-Medco rescue is off; both sides play the blame game
HYFLUX said on Thursday that a key rescue deal from the Salim-Medco group is officially off, with just weeks to go before the water and power plant company loses court protection from creditors.
Hyflux has cancelled scheme meetings scheduled for April 5 and 8. There is also no need for shareholders to attend an extraordinary general meeting scheduled for April 15, the company said.
Now both sides are arguing over who killed the deal. The answer may determine who gets to pocket the S$38.9 million deposit that Salim-Medco (SMI) put into escrow last year, upon agreeing to play white knight for Hyflux.
Reacting to Hyflux's announcement on Thursday, SMI, led by Indonesian billionaire Anthoni Salim, said it was "surprised" by Hyflux's "purported termination" of the rescue deal, and will be taking legal advice in relation to Hyflux's action.
In a late Thursday night filing, Hyflux said it wrote to the investor to request a clear and unequivocal written confirmation of its commitment, and stated clearly that the company would have no choice but to terminate the restructuring agreement if the investor declined to do so.
"Regrettably, the investor, in a letter from its lawyers dated 4 April 2019, declined to provide the written confirmation sought," Hyflux added.
Salim-Medco was supposed to invest S$530 million into Hyflux in exchange for a 60 per cent stake once Hyflux's debts had been cleared, an investment that formed a key pillar in Hyflux's restructuring plans.
But SMI had a change of heart in recent weeks, citing concerns about Hyflux's working capital requirements and the cash distribution plan under the proposed restructuring.
On Thursday, Hyflux said it had tried to meaningfully engage with the Indonesian investor group on multiple occasions: "However, in light of the investor's responses and conduct, the company has no confidence that the investor is prepared to continue to complete the proposed investment."
It added: "They have also not refuted the statements in the media that SMI was 'slated to walk away' from the deal. Without the confirmation from SMI to dispel the overhanging uncertainty over this deal, it would not be possible for the stakeholders to have a proper vote."
Effectively, Salim-Medco has repudiated the restructuring agreement and Hyflux has accepted its repudiation, the Singapore company said.
"The restructuring agreement is therefore terminated," Hyflux stated.
More at https://www.businesstimes.com.sg/companies-markets/hyflux-says-salim-medco-rescue-is-off-both-sides-play-the-blame-game-0
Masaghost just told Hyfuck investors to go fuck themselves. Outstanding hah.
https://www.businesstimes.com.sg/government-economy/taxpayers-cant-bail-out-hyflux-investors-masagos-tells-parliament
Who the fuck did they vote? Let me guess.....the People's Adulterers Party?
http://dishonest.biz/forum/index.php/topic,258
https://www.straitstimes.com/business/more-than-100-hyflux-investors-protest-at-hong-lim-park
PUB accedes to Tuaspring’s request to extend default notice period
NATIONAL water agency PUB said on Friday that it has acceded to Hyflux subsidiary Tuaspring Pte Ltd's request for more time to cure its defaults.
The default notice period has been extended to April 30, subject to conditions, instead of April 5.
PUB said that Tuaspring Pte Ltd (TPL) had on Wednesday requested for the deadline to be pushed out to the end of April.
It said in a statement on Friday: "TPL noted that it is currently loss-making and will require financial support from Hyflux. However, Hyflux's ability to provide financial support to TPL will depend on whether it is able to complete its restructuring and to obtain the investment from SM Investments."
SM Investments (SMI) is the Indonesian investor group led by billionaire Anthoni Salim that had agreed in October last year to give Hyflux a S$530 million lifeline in exchange for a controlling stake in the company once all its debts are settled.
Hyflux creditors are scheduled to vote on this rescue plan on April 5, although SMI said on Thursday that the deal no longer has its endorsement.
One of the main points of dispute arose from PUB's default notice. On March 5, PUB served a default notice to TPL, seeking remedy for both operational and financial defaults.
SMI has taken the position that PUB's default notice constitutes a "prescribed occurrence" that allows it to call off the rescue deal.
On the other hand, Hyflux has argued that a prescribed occurrence would take place only if PUB terminates its water-purchase agreement (WPA) with the Tuaspring water desalination plant. Such an event has not yet taken place, and the earliest that PUB can exercise its right to terminate the water contract – if Tuaspring's defaults were not remedied – was on April 6, Hyflux said. (With the extension, that date is now May 1).
Now that PUB has agreed to give TPL more time to cure its defaults, the ball is in SMI's court.
More at https://www.businesstimes.com.sg/companies-markets/pub-accedes-to-tuaspring%E2%80%99s-request-to-extend-default-notice-period
No thanks to Olivia Lum, Hyflux is now officially a hot political potato.
Probably most of the folks went there to see show rather than to actually protest; remember we sinkies are pathetic cowards.
Kaoz still got free vegetarian bento set??????? I should have gone then.........