SINGAPORE: Hyflux founder and CEO Olivia Lum will be present at three townhall meetings that the water treatment firm is holding next month and time will be set aside for stakeholders to ask questions.
Further details, such as the attendance of other company representatives and the format of the meetings, will be confirmed closer to date, a spokesperson told Channel NewsAsia on Thursday (Jun 21).
Seen as one of Singapore’s most successful business stories, Hyflux made the unexpected move last month to seek court protection for a reorganisation of its business and liabilities. The household name, which first made its mark in water treatment and later ventured into power generation, cited “prolonged weakness” in the local power market for the turnabout in fortunes.
Trading in its SGX-listed shares and related securities has since been suspended, leaving tens of thousands of retail investors reeling.
On Tuesday, as it was granted a six-month moratorium by the High Court, Hyflux said it would hold three townhall meetings with holders of its notes, preference shares, perpetual securities and ordinary shares on Jul 19 and 20 at its office in Kallang Bahru.
The meeting for noteholders is scheduled at noon on Jul 19, while investors of perpetual securities and preference shares will have theirs at 7pm. The session for ordinary shareholders will be on the following day at 7pm.
Hyflux said it understands that investors are worried and having separate sessions will enable the company “to better answer respective queries”.
The spokesperson added that Hyflux will work with investor advocacy group, Securities Investors Association (Singapore) (SIAS), to “effectively engage” all stakeholders.
“(We will) walk them through their queries and update them regarding our plans as much as we are able to,” it said, while noting that more townhall meetings could be held if necessary.
“It is Hyflux’s duty to communicate as regularly as we are able to with our investors.”
EXPECTING A “FAIRLY BIG NUMBER” OF INVESTORS: SIAS
With the townhall meetings next month being the first that Hyflux will have with its 50,000-plus retail investors, SIAS, which is helping the company to organise these sessions, is expecting a “fairly big number” of stakeholders to turn up.
As of Thursday, about 400 investors have indicated their interest, said SIAS president David Gerald.
Should the sign-ups for each townhall meeting exceed 1,000 – the maximum capacity for the auditorium where the sessions will be held – alternative arrangements will be made, added Mr Gerald, who assured that the upcoming meetings will look to accommodate as many retail investors as possible.
“We are organising this so that all investors can get detailed updates from the company,” he said, while noting that SIAS has facilitated about 20 such townhall meetings over the past year. “These have proved to be useful in helping investors to know where they stand and what is being done to bring the company back to its feet. Investors have the right to know.”
Noting that SIAS is actively in touch with Ms Lum who has reiterated Hyflux’s commitment to “work hard to bring back value” for all investors, Mr Gerald added: “She has assured me that she will be on stage to explain what is happening and what she will be doing with her team.”
Analysts Channel NewsAsia spoke to welcomed the townhall meetings as “positive” and “proactive” steps that Hyflux is taking to engage its huge group of mom-and-pop investors.
iFast senior fixed income analyst Ang Chung Yuh said: “They’ve been proactive and have come out early to hold such meetings. This treatment of retail investors so far is pretty encouraging, which hopefully means that retail investors can get a fairer treatment relative to the other creditors.”
Investors should seize the opportunity to ask questions about the company’s plans moving forward.
“There’ll be a tendency to find out what went wrong but this is literally water under the bridge. This is a very positive platform for investors to voice their concerns in a systematic and formalised way to Hyflux, and I think the focus should be on what the company is doing to rescue the situation,” said Associate Professor Lawrence Loh from the National University of Singapore’s (NUS) Business School.
Echoing that, Mr Ang said: “The questions that need to be answered will be how Hyflux intends to approach the restructuring. More details should be given like whether there’ll be any debt-to-equity conversion involved.”
He added: “Is the S$200 million in rescue financing enough and how long can that sustain them? Also, once this is done with, what’s their business model going to be like moving forward."
On that note, Mr Gerald, who will be moderating the townhall sessions, urged stakeholders to attend the meetings to voice their concerns but at the same time, “exercise patience”.
“You cannot have a resolution within one or two months and you can’t do fire sales because that would be against the interest of all stakeholders. To get the company back on its feet, it needs to inject working capital and look at long-term investments. That’s why investors must exercise patience.”
ANOTHER COURT HEARING
In a separate announcement late on Thursday, Hyflux said a court hearing with respect to an application for a moratorium by its subsidiary, Tuaspring, has been scheduled on Jul 6 at 2.30pm at the Supreme Court.
At the hearing earlier this week, Tuaspring obtained leave to discontinue its application for a debt moratorium and pursued a separate application. As such, the six-month reprieve from creditors granted on Tuesday only included Hyflux and four other subsidiaries, namely Hydrochem, Hyflux Engineering, Hyflux Membrane Manufacturing and Hyflux Innovation Centre.
In the latest statement, the company clarified that Hyflux and these four subsidiaries under moratorium hold a cash balance of S$18.6 million as of Jun 4.
This amount “does not take into account amounts deposited in debt service reserve accounts as required by the project finance lenders or in fixed deposit accounts (over which there is no charge) as required by the banks issuing/renewing performance bonds, and amounts in overseas jurisdictions”, it said.
Hyflux and its subsidiaries are also in discussions with the project finance lenders of the TuasOne waste-to-energy project and the Qurayyat Integrated Water Project regarding access to funding to enable the completion of construction of these projects.
The statement added that Hyflux “consistently adopts an asset-light strategy” and will continue to explore divestment opportunities for its completed projects. In particular, the Tuaspring Integrated Water and Power Project and the Tianjin Dagang Desalination Plant in China.
“The Group is currently exploring multiple possible solutions as part of the court supervised reorganisation process, including but not limited to rescue financing and the seeking of suitable investors, and will provide an update when a firm proposal has been formulated,” it said.
“Any injection of funds from investors may be applied towards a multitude of uses within the Group, including to pursue potential projects and completion of pending projects, depending on the terms of investment and the needs of the Group at the time.”