White knight? What white knight? Dark days loom ahead for Singapore investment community as Hyflux enters its final chapter of its protracted restructuring process. On 17 April, I wrote that Hyflux is on course for a horror finale. That fateful day, PUB issued a 30-day notice to Tuaspring Pte Ltd (TPL) to terminate the Water Purchase Agreement (WPA) and take over the Tuaspring Desalination Plant (TSDP).
When Hyflux sought bankruptcy protection from the High Court back in February 2018, nobody could have imagined the outcome of today. There were plenty of high hopes as former white knight, SM Investments, had emerged out of nowhere to dangle a $530million rescue mission in late last year. But more than a year later, Hyflux appears to be on course for liquidation following the collapse of the rescue package. It must have been a devastating roller-coaster ride for Hyflux investors.
Hyflux going down in flames?
Evidently, PUB only intended to take over only the desalination plant of Tuaspring. On the other hand, the latest development triggered its largest creditor, Maybank, to terminate the Collaboration Agreement and take over the power plant. Although the latest move meant that Hyflux had finally disposed the ill-fated Tuaspring Integrated Plant, investors must not rejoice yet. This is because without Tuaspring, a big question mark would center around Hyflux’s ability to settle its mountain of debts. Without a major asset sale like Tuaspring, it remains to be seen how Hyflux could avoid an explosive liquidation. As of 30 September 2018, the loan and borrowings amounted to a whopping $1.56billion.
To add to the shambolic mess, Hyflux is slugging it out with former white knight, SM investments, in the courtroom over the latter’s repudiation of the restructuring agreement and to claim the $38.9million deposit. In turn SM investments sued Hyflux for unilaterally cancelling the agreement.
Amidst the chaotic drama, investors of Hyflux must be left ruing what is in store for them. After all, they are perceived to be the biggest victims out of this big fiasco. To be sure, any legal windfalls or money recovered from the remaining asset sales would have to go to the major creditors first, and not the shareholders nor perpetual holders. Minister for the Environment and Water Resources Masagos Zulkifli already reiterated this point during the recent Parliament sitting. Thus, investors should not harbour any false hopes.
Investors must learn from setback
As outrageous it may sound, investors must [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
In a bid to raise financial literacy and reward SG Wealth Builder members, I am pleased to launch the Best SGX stock research campaign. Winner of this contest gets to receive cash prize of $1000!
The rationale for launching this activity is to level the playing field for retail investors, who often lack access to quality SGX stock research, especially homegrown SME stocks. Through this SGX stock research campaign, I hope to raise interest in SGX stocks among local investors, and at the same time, encourage members to share ideas and showcase their analytic skills. The winning entry will be published in this blog for learning purposes.
The winning SGX stock research article must cover a stock that is listed in Singapore Exchange (SGX) and should be engaging and interesting to read. From a story-telling perspective, you can share your best or worst SGX stock investments and what valuable lessons that can be gleaned. Ideally, the article should also contain data to back up the thesis and provides insightful analysis.
Winning prize: $1000
- This campaign is open to existing SG Wealth Builder Members only. If you are not a member, please sign up here. Email subscribers are not eligible.
- Each SG Wealth Builder member is entitled to submit one article only.
- Each article must be at least 1000 words in Microsoft Word document. Must not be published at any platform before. Any article found plagiarism would be automatically disqualified. You do not need to provide infographic or images but if you do, they must carry the applicable licenses.
- Email your submission to [email protected] from 1 April 2019 to 31 May 2019. Late submission will not be entertained.
- In your document submission, you must provide your member userid or email address.
- The winning entry will be announced on 7 June 2019 and the winner will be notified through email. He/she must give the consent for the article to be published in this blog in order to receive the cash prize.
- In the event of a lack of quality submissions, there may be no winner. However, under such circumstances, consolation prizes may be given for entries that do not meet the evaluation criteria.
Not a member yet? You may sign up to become a member of SG Wealth Builder. The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Participate in SG Wealth Builder campaigns
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles and Wealth Forum
SG Wealth Builder Membership
You may sign up for the SG Wealth Builder Membership for only $15 per month. As a member, you can access all the articles, including the premium ones.
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.