Some disappointed, others keep calm: Hyflux shareholders meet company management for first time since crisis

Some disappointed, others keep calm: Hyflux shareholders meet company management for first time since crisis

About 800 holders of Hyflux's notes, perpetual securities and preference shares got their chance to meet the management for the first time since the company applied for court protection in May.

Hyflux building at Kallang Bahru Rd
The townhall sessions were held at Hyflux Building along Kallang Bahru Road on Jul 19, 2018. (Photo: Tang See Kit)

SINGAPORE: Holding on to bonds that will be maturing next September, Ms Teo attended the townhall session held by local water treatment firm Hyflux on Thursday (Jul 19) hoping to know if she will get her money back. 

But she left feeling disappointed, said the investor who declined to reveal her full name. 

“It felt like they needed to do their due diligence in giving us an update but it was as good as no information.” 

Another retail investor, who spoke to Channel NewsAsia on condition of anonymity, echoed these sentiments.

While he appreciated the explanation behind Tuaspring Integrated Water and Power Plant's losses and the company’s decision to seek court protection, the retiree wanted more updates on the divestment of the plant and what that means when the 4.25 per cent bonds that he had invested S$250,000 into mature this September.

“There isn’t a conclusion and everything still hinges on the sale of Tuaspring and at what price. But my investment is due in September and that’s what I’m most concerned about,” he told Channel NewsAsia.

“I’m retired so this was going to be a key part of my income but now, not just the income, I have to be worried about my capital. My kids are going to university soon so I have to figure another way out.” 

Seen as one of Singapore’s most successful business stories, Hyflux made the unexpected move on May 22 to seek court protection for a reorganisation of its business and liabilities. The household name, which first made its mark in water treatment before venturing into the power market, 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. This includes 34,000 holders of its perpetual securities and preference shareholders, as well as 16,000 shareholders. 

To address these concerns, Hyflux partnered investor advocacy group, Securities Investors Association (Singapore) (SIAS), to organise three townhall sessions.

The first was held at Thursday noon for the noteholders, followed by a session at 7pm for holders of preference shares and perpetual securities. About 800 stakeholders registered for both sessions, according to SIAS. The evening session, in particular, was packed to the brim with about 600 investors.

Another 155 ordinary shareholders will get their chance to quiz the management, including Hyflux founder-CEO Olivia Lum, at their session on Friday at 7pm. 

SESSION "QUITE CIVIL AND ORDERLY"

The company’s chief financial officer Lim Suat Wah said the townhall sessions will help investors understand the company’s current circumstances. 

“We did an update on the company because we realised that a lot of the stakeholders may not sufficiently understand the business,” she told reporters after the first townhall session on Thursday. 

“We also gave them a sense of what’s going to happen moving forward," added Ms Lim, who is also the group executive vice president. "In terms of the restructuring plan, at this point, we do not have a plan to share."

SIAS president David Gerald said the panel answered a slew of questions ranging from the losses in Tuaspring to the CEO’s salary.

“Olivia and her team were forthcoming and frank in their responses,” Mr Gerald told Channel NewsAsia, while noting that the townhall meeting for noteholders “was quite civil and orderly”. 

“There were no heated moments,” he added. 

This was echoed by investors Channel NewsAsia spoke to who described the atmosphere as “grim”, “serious but cordial” and that questions came rapidly during the question-and-answer segment. 

Given how this was Ms Lum’s first public appearance since the company’s unexpected move, some also said the founder was “well prepared” and came off as “sincere” after starting her speech with an apology. 

“She performed well and I thought she was well prepared for the questions,” said Ms Teo. 

Another noteholder told Channel NewsAsia that the session was “re-assuring” for him to some extent. 

“For me, I wasn’t as updated as others before the meeting so I thought there was some new information today. It was also a bit reassuring to hear all these from the horse’s mouth, and in front of SIAS, their legal and financial advisors, and so many of us,” said the investor in his mid-60s, who preferred to remain anonymous. 

“True, there were answers on Tuaspring that weren’t forthcoming but that’s because they didn’t even know who these prospective buyers were, which is fair enough,” he added. 

Agreeing, Mr Martin Lee, who attended the evening townhall session, said that he did not have much expectations given that this was the company’s first such meeting with stakeholders. 

“I didn’t expect any plans given that this is just the first session … How much money we can get back will depend on how much they can sell Tuaspring but since they don’t have a buyer nor a sale price, it’s not possible for them to give us any updates. They just don’t have the money,” he told Channel NewsAsia. 

FORM STEERING COMMITTEE, MORE TOWNHALL SESSIONS TO COME: SIAS

In between the sessions on Thursday, Ms Lum told reporters that Hyflux is working hard to keep the company afloat and to ensure fair treatment for all stakeholders, including retail investors.

On the sale of the company’s single largest asset, Hyflux said there are eight bidders for Tuaspring at the moment, but the company has not received any “real firm offer”. 

Meanwhile, though she wants the consent solicitation exercise to take place “as soon as possible”, it will take time to iron out the details given the big number of stakeholders and lenders that Hyflux has. 

Moving forward, Mr Gerald from SIAS told Channel NewsAsia that the next step for stakeholders will be “to form a steering committee” and “appoint an independent legal advisor to help them understand the restructuring”. 

He also added that there will be more townhall sessions to come. 

Source: CNA/sk

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