Hyflux town hall meeting

I was at the Hyflux town hall meeting last night. It was very well organized meeting by SIAS and Hyflux. I left as soon as the presentation ended without waiting for the Q&A. Its only natural that there will be many disgruntled investors who will want to voice their regrets of loss of savings.

Nothing really new presented that was not previously known. Not confirmed, but hints were given of possible government related entities getting involved. Here are some interesting points that was highlighted. Note that I cannot be held responsible for the accuracy of this blog as recording and photo taking was not allowed.

Debts and Assets

  • Total Debts: $3B
    • Bank loans : $1.3B
    • Senior bonds : $0.8B
    • Preference shares and perpetual bonds : $0.9B
  • Hyflux assets worth $2.9B
  • Tuaspring worth $1.2B likely be sold in the next few months, despite all the difficulties of finding  buyers.

Hyflux legal and business stance

  • Hyflux is not under any legal action to wind up their company, but what they are doing is to voluntarily submit to a legal process so as to focus on their business and to deliver full value to their  stakeholders.
  • Debt restructuring are mainly in the hands of accountants and lawyers. They were the one answering questions on where the company is heading for the next 6 months.

Olivia Lum and staff

  • Olivia Lum emphasized that she would like to protect the “small” investors.
  • She has not sold any of her shares, preference shares, and perpetual bonds.
  • She has not had a pay increase since 2011. Her staff had their bonus and pay increment frozen since 2015.
  • 16% of staff has left without replacement. Hyflux business has been expanding while not replacing staff.

Hyflux supplies 2% of Singapore water needs. The reason for cashflow troubles is mainly due to oversupply of natural gas in Singapore, which driven down electricity prices. This caused Tuaspring, which supplies electricity, to have losses over the past couple of years.

Well, from the way the lawyers presented, Tuaspring will likely be sold in the next 3 months. Will this be  enough? Or will there be further solicitation for stakeholders to have a haircut?

Important dates are 19 Sep, where there will be an update to Court, and 19 Dec, which should conclude this 6 months moratorium.

In the meantime, I suggest investors should set a low expectation of the results, but keep a positive outlook in life.

  • I'm a remisier with Maybank Securities, and as a bonds and REITs investor myself, I guide my clients to build resilient bonds and REITs portfolios. If you like to be guided, please open a trading account to become my client; It's free!