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Author Topic: Hyflux Ltd [Certified Very Disgraceful]  (Read 5372 times)

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Hyflux Ltd [Certified Very Disgraceful]
« on: March 31, 2019, 08:57:14 PM »
More than 100 Hyflux investors protest at Hong Lim Park
Mar 31, 2019 | Grace Leong
Business Correspondent

Protesters were hoping to rally a "no" vote to Hyflux's rescue plan.

Hyflux investors gathering at the Speakers’ Corner of Hong Lim Park yesterday. The water treatment firm owes a total of $900 million to some 34,000 perpetual securities and preference shareholders. But investors stand to suffer heavy losses from the company’s restructuring plan, which may see them recover around 3 per cent in cash and 7 per cent in equity. ST PHOTOS: JASON QUAH

More than 100 retail investors of Hyflux perpetual securities and preference shareholders - many of whom were elderly, with at least one in a wheelchair - held a protest at Hong Lim Park yesterday against the company's restructuring plan and recent developments involving the beleaguered water treatment firm.

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."

The former nurse from Changi General Hospital was also at Hong Lim Park to protest after the ill-fated Lehman Brothers-linked Minibonds turned sour following the collapse of the United States investment bank 10 years ago.

The collapse led to nearly 10,000 retail investors in Singapore losing most or all of their investments, totalling around $520 million.

Madam Koh is among some 34,000 Hyflux perpetual securities and preference shareholders who are owed a total of $900 million, but stand to get a recovery rate of 10.7 per cent - around 3 per cent in cash and 7 per cent in equity.

Even though Hyflux has proposed to amend its scheme to offer them higher cash recovery rates, this depends on whether all contingent claims are extinguished over a period of two years.

The Hyflux protest, which began at 3pm, saw organiser Alex Leong and former NTUC Income chief executive Tan Kin Lian speaking to the company's investors, many of whom turned up to appeal to national water agency PUB to consider compensating them out of "moral obligation or goodwill".

The protesters were also hoping to rally a "no" vote to Hyflux's rescue plan, and to get the authorities to investigate the company and its alleged mis-selling.

Opposition politician Lim Tean, a lawyer and founder of the People's Voice, Singapore's 11th political party, was also at the rally.

Mr Leong, who was in a mask, said Mr Lim shook his hand and offered him legal services. Mr Leong added that it was too early to determine the effect of the protest, if any.

But many of those who turned up yesterday saw it as a platform to vent their frustrations, especially after the PUB said it would take over Hyflux's Tuaspring desalination plant for zero dollars and waive the compensation sum the agency is entitled to, if Hyflux does not fix its defaults by April 5.

But on Friday, PUB extended the default notice period to April 30, subject to conditions.

But the $530 million lifeline thrown by Salim-Medco consortium SM Investments (SMI) - in exchange for a 60 per cent stake in Hyflux once all its debts are settled - is looking shaky.

This is after SMI said on Thursday that it did not agree to $271 million of its $530 million investment being used to settle Hyflux's financial obligations, which include debt owed to the senior creditors and perpetual securities and preference shareholders.

When asked yesterday, a Hyflux spokesman said: "We do not know what (SMI) says the cash amount to settle financial obligations should be, as they have not told us what they are agreeable to."

But she added: "The revised scheme did not change the total cash being distributed, but provided for the perpetual securities and preference shareholders to share in the cash pot allocated to the settlement of contingent claims."

On the protest, Hyflux said it "understands the frustration and regrets the dissatisfaction that has caused some stakeholders to protest".

"We hope that notwithstanding their disappointment in Hyflux, they will vote on the basis of what is commercially and legally realisable in terms of recovery. Unlike in a liquidation, the scheme permits junior ranking creditors to receive payment, even when the senior creditors are not fully paid," the spokesman said.
Couple lost $200k of retirement funds

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.

The couple were among those who turned up for yesterday's protest at Hong Lim Park to show their support for the "no" vote to Hyflux's restructuring plan on Friday.

Madam Hong, 53, said: "I'm voting 'no' on April 5. If someone takes away your money and then gives you back 3 per cent, and tells you that you should be very thankful, how would you feel?

"I can't believe they are telling us that something is better than nothing... Please don't insult us further."

She believes that SM Investments (SMI) may be backing out of the deal but may wait for the vote's outcome.

"This is so that Salim(-Medco) can legitimately say people voted no, so give me back my escrow money," she said.

Hyflux warned last Thursday that if SMI were to "wrongfully terminate" the agreement, the water treatment firm would be able to lay claim to the $38.9 million deposit taken out of SMI's proposed investment that was placed in escrow.

Even if voting "no" meant that would damage their chances of recovering a portion of their investment, Mr Ong seemed determined.

"What's the difference between getting 3 per cent (in cash recovery) and not getting it? If we sink, then we sink together," he said.
Temasek invested, so couple did so too

For Madam B. Chua, 62, the $6,000 loss from her investment in Hyflux perpetual securities was just "a forgone holiday".

But she said she understood the pain felt by many retirees at the Hong Lim protest yesterday. Her husband, who was not at the rally, had lost under $100,000 of his investment.

"Many of us had kept quiet initially. But I felt I had to come to the protest. We must voice that we do care," Madam Chua said.

"We invested in Hyflux because government support for the company was very strong. We invested because Temasek had invested. And Temasek must have done its due diligence."

Temasek is a national investment company.

But she also acknowledged that Temasek had reduced its stake in Hyflux. By 2006, Temasek was no longer on the list of Hyflux's top 20 shareholders.

"When banks sold the securities to us, they told us 'Temasek invested, so don't worry. And if you don't buy, somebody else will,'" Madam Chua said.