Hyflux

[nutty]

6%... interesting.

Higher than last year's DBS Pref Shares (4.7%)

[Musicwhiz]

6%... interesting.

Higher than last year's DBS Pref Shares (4.7%)

Can't quite compare like this, I feel. DBS is the bluest of blue chips while Hyflux, though a strong and reputable company, requires a lot of upfront capex to grow and has yet to achieve the kind of blue-chip status which is accorded to more established companies (like SPH, Venture and Keppel Corp).

Hence, a higher yield is offered due to the higher risk involved of the Company not being able to honour the dividend payments.

Just my 2-cents.

[piggo]

It's priced at 100.25, so the yield isn't 6%. Regardless, it seems they are really in need of cash! Won't bank loans be cheaper atm?

Fyi it's minimum 100k with minimum 1k increments.

[ecym]

100k min is for placement...retail is min $10k with 1k increment..

not so sure abt the issue price - getting mixed info on that...

[Musicwhiz]

Issue price is $100 per share right? Where does it say $100.25?

[Jacmar]

It's priced at 100.25, so the yield isn't 6%. Regardless, it seems they are really in need of cash! Won't bank loans be cheaper atm?

Fyi it's minimum 100k with minimum 1k increments.

Not sure what you said is correct. the way i read it is that it is $100 per share and the 0.25 is more for stamp duty executed outside singapore. for the electronic application , just the application fee of $2 only. hence it is just $1002 if you apply for 10 shares...1 lot.

also each share is $100 and each board lot is 10 share. so it will be traded at minimum of $1000 per lot. don't know where you get the 100k number.

they can't go to the bank becos their b/s is already quite stretch and they don't want to do placement as not to dilute their shares. so preference share is the best route. they could have gone the bond route though...wonder why? problem with bond is that it is not perpetual whereas this is. you don't have a clock ticking against you.

[freedom]

minimum $10,000, with minimum 1k increments.

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Hyflux was paying around 4 cents/share for common share. the yield on common stock was around 2%.

Hyflux issues cumulative 6% preference share.

is it fair to common stockholders?

[piggo]

Its what I got from my broker, actually 100.25 looks good too :p

ISSUER : Hyflux ISSUE : Class A Cumulative Preference Shares ISSUE DATE : 25 April 2011 MATURITY DATE : Perpetual CALLABLE DATE : 25 April 2018 SIZE : 200million with option to upsize to 400million TENOR : Perpetual non-call 7 years PRICE GUIDANCE : 6% ( Step up to 8% after Call Date ) PRICE : 100 PRICE TO CLIENT : 100.25 REG. CALL/SWITCH : None REDEMPTION DATES : Callable 25 Apr 2018, and each interest paymt date thereafter COUPON : Fixed rate s/a Actual/365 TERMS/LIST/LAW : SGD 100k min increments of 1k /SGX-ST/

[Musicwhiz]

Business Times - 14 Apr 2011

Hyflux selling $200m of preference shares

The 6% cumulative shares are priced at $100 each; minimum purchase is $10,000

By MAXIE AW YEONG

HYFLUX is offering for subscription up to $200 million of preference shares carrying a dividend rate of 6 per cent per annum. The company has the option to double the offer size to $400 million.

The cumulative Class A preference shares (Class A CPS) are priced at $100 per share. The minimum purchase under the public offer is 100 shares ($10,000), with subsequent multiples of 10 shares ($1,000). CPF members can use up to 35 per cent of their CPF investible savings for the public offer.

The shares are perpetual, 6 per cent cumulative, non-convertible and and non-voting. The dividend, if declared, will be paid semi-annually subject to certain conditions.

Hyflux has the option to redeem the shares on or after April 25, 2018. If they are not redeemed then, the dividend rate will be stepped up to 8 per cent.

Of the total shares, the company may offer up to $20 million worth to Hyflux directors, management and employees, and its subsidiaries under the reserve offer. However, the offer under the reserve offer and placement tranche may not exceed $200 million.

Proceeds from the offer will be used to fund the company's newest projects in Singapore and China, and deals that may be secured later this year, said Hyflux chief financial officer Cho Wee Peng.

Mr Cho added that the characteristics of Class A CPS are more suitable for Hyflux's needs. 'Overall gearing for the group remains at a comfortable level,' he said.

DBS is the sole lead manager and bookrunner of the offer, and Stamford Law Corporation will advise the company.

Group president and chief executive officer Olivia Lum said: 'We view the Class A CPS offering as one of the more suitable options for our needs, and more importantly, non-dilutive to existing Hyflux ordinary shareholders.'

The public can apply for the Class A CPS from 9am today through the automated teller machines of DBS (including POSB), OCBC, UOB and its subsidiary Far Eastern Bank, or Internet banking websites of DBS and UOB.

The offer closes at noon on April 20, and the shares are expected to be listed and traded on mainboard from April 26.

[dydx]

minimum $10,000, with minimum 1k increments.

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Hyflux was paying around 4 cents/share for common share. the yield on common stock was around 2%.

Hyflux issues cumulative 6% preference share.

is it fair to common stockholders?

It only shows how desperate Hyflux is trying to raise medium-term funding. Investors must bear in mind that the money raised from the pref shares will likely be used to fund the capital required to start new BTO/BOT water projects, which are themselves usually financed by additional, large non-recourse term debts.

Just for yield alone, I will prefer to own/hold shares in say Adampak.