SINGAPORE: A protest against Hyflux’s restructuring plan and recent developments surrounding the embattled water treatment firm has been planned for Saturday (Mar 30) afternoon at the Speakers’ Corner in Hong Lim Park.
The event will be held from 3pm to 4pm, according to an email sent to Channel NewsAsia on Monday.
The organiser, a perpetual securities and preference shareholder who wished to be known only as Alex, said that a group of retail investors like him had been discussing the idea of a protest for some time.
“But thereafter I did not hear any more from the group (so) I organised one on my own,” the Singaporean told Channel NewsAsia in an email, which included a screenshot of the permit he had obtained from the National Parks Board (NParks).
Among the objectives of the protest is to appeal against national water agency PUB’s latest statement, said Alex.
It was a “ruthless” announcement that has been “hard to swallow” for retail investors, given that their investments had been used by Hyflux to fund the building of the integrated plant, said Alex.
Besides, Tuaspring remains an operational plant and still holds value.
As such, many perpetual securities and preference shareholders hope PUB can consider compensating them “out of moral obligation or goodwill”, he added.
READ: PUB ready to take over desalination plant at zero dollars if Hyflux's Tuaspring does not resolve defaults
The protest also hopes to rally a “no” vote for Hyflux’s restructuring proposal, which asks that perpetual securities and preference shareholders accept a recovery rate of 10.7 per cent – roughly 3 per cent in cash and 7 per cent in equity.
Even as Hyflux has proposed to amend its scheme to offer minority shareholders higher cash recovery rates, this remains hinged on contingent claims being extinguished over a period of two years – a “mission impossible” given the company's state of affairs, said Alex.
News of the upcoming event has largely been met with support from retail investors in a chat group on messaging app Telegram.
Mr Ricky Lin told Channel NewsAsia that he did not know if a protest would bring about any change, but he "remained hopeful”.
Mr Lin also said he was pinning his hopes on the upcoming event to be enough to get authorities and local bourse operator Singapore Exchange started on investigations into Hyflux.
This is the latest twist in events as the former star company navigates an increasingly challenging attempt to restructure its staggering debts and garner a new leash of life.
Its restructuring plan will be put to vote on Apr 5 and to pass, the scheme needs to be approved by at least 50 per cent in number and 75 per cent in value of each creditor class present.
However, with the potential white knight SM Investments (SMI) warning that it will terminate the deal if Hyflux fails to remedy its defaults with PUB, some market observers think there is a possibility that the creditors’ meeting next week could be called off.
“Our starting point is there may not even be voting on Apr 5 given that SMI had asserted their rights to walk away and have not rescinded this yet,” said OCBC Credit Research analysts.
They reasoned that PUB’s announcement last week revealed for the first time a “negative” current valuation for the desalination plant’s purchase price and that Tuaspring has to pay compensation to the national water agency.
“If like us, SMI Investments were also not aware of the severity of problems at Tuaspring prior to PUB’s latest announcements, then this increases the probability of them walking away (because) why invest S$530 million when there is no Tuaspring or why buy a lemon and take on the liabilities?”
“Weighing possible scenarios, we think the likelihood for SM Investments walking away is still higher,” OCBC analysts told Channel NewsAsia.
Earlier on Monday, the the Securities Investors Association Singapore (SIAS) urged Hyflux to provide updates on whether the rescue deal involving the Salim-Medco consortium is still on the table. Hyflux has not replied to request for comment.