http://www.businesstimes.com.sg/companie...n-about-q4
Hyflux posts 55% fall in Q3 profit, sounds note of caution about Q4
By
Jamie Lee leejamie@sph.com.sg@JamieLeeBT
6 Nov5:50 AM
Singapore
WATER treatment group Hyflux Ltd sounded a cautious note on its business prospects on Wednesday, with its net profit for its third quarter falling 55 per cent on weaker sales.
"The group remains cautious on its business outlook given the mixed global economic conditions
It is a small deal, but I am taking small deals as indicators of future big deal...
(not vested)
Hyflux seeks bondholders' approval to amend trust deed
SINGAPORE (Jan 13): Hyflux is seeking approval from bondholders to amend a trust deed relating to its $800-million multi-currency debt issuance programme.
Among other things, the water treatment firm wants to broaden the programme's interest cover covenant to include its unencumbered cash position.
It also wants to change the frequency of providing to DBS Bank ( Financial Dashboard), as trustee for the bondholders, certain compliance certificates to a semi-annual basis instead of the current quarterly basis.
Hyflux has issued $420 million worth of notes so far under the debt issuance programme.
Hyflux shares rose 1.1% to 92 cents yesterday
http://www.theedgemarkets.com/sg/article...trust-deed
HYFLUX SIGNS WATER PURCHASE AGREEMENT FOR QURAYYAT
INDEPENDENT WATER PROJECT IN SULTANATE OF OMAN
http://infopub.sgx.com/FileOpen/News%20R...eID=340279
Muscat, 25 March 2015 – Hyflux Ltd (Hyflux) is pleased to announce that it has been formally awarded the Qurayyat Independent Water Project (Project) by Oman Power and Water Procurement Company SAOC (OPWP), following the signing of the water purchase agreement between OPWP and Hyflux's subsidiary, Qurayyat Desalination SAOC (Qurayyat Desalination Company).
Hyflux holds 85% of the shares of Qurayyat Desalination Company through its wholly-owned subsidiaries, Hyflux Utility (Oman) Pte Ltd and Hyflux International Pte Ltd. Modern Channels Services LLC (MCS) holds the remaining 15% of the shares.
The seawater reverse osmosis desalination plant, which will be located in Qurayyat in the Muscat governorate, is Hyflux’s largest desalination project in the Sultanate of Oman. Under the agreement, desalinated water from the Project will be supplied to OPWP for a period of 20 years, from 2017 to 2037. This will add another 200,000 cubic metres per day of drinking water to the country’s water supply.
http://infopub.sgx.com/FileOpen/Hyflux_F...eID=390005
Hyflux full year results was decent. But what amazed me was how the business is constantly having a negative cash flow generation and keeps taking on more debts. With dividend outflow of 65Mil due to mainly cumulative perpetual securities, I wonder how long can Hyflux sustain this debt binge.
Hi Cy09,
I remember that some one on VB only gave a simple advise, buy preference share, skip the common share.
There is a good analysis at bullythebear on this. Same at Smol.
Broadly, at least over the last five years. They just borrow and use the debt to fund their negative cash flow.
But, crucially, the debt I.e. preference shares counts as equity and not debt.
Now, if interest rates rise, they might be in a spot of bother! But, rates have not budged in the last five years.
More perpetual securities for the company?
(not vested)
Hyflux offering up to $300 mil in perpetual securities
SINGAPORE (May 17): Water company Hyflux is offering up to $300 million in perpetual capital securities.
The issue price of the securities is set at $1 each with a distribution payment rate of 6% per annum.
...
http://www.theedgemarkets.com/sg/article...securities
Aren't perpetual securities akin to common shares or equity in terms of risks to their holders?
With a return of only 6%pa, seriously, no thanks!
Perpetuals are ranked higher than ordinary shares and lower than bonds (secured and unsecured)
To me, there is value to this perpetuals as the holders will have claim to Hyflux's assets before common shareholders. Currently out of 3 Bil of Hyflux's assets, 367 mil belong to ordinary shareholders. As this tranche of proceeds is likely to be used to redeem existing bonds, new perpetual holders will have to ask is Hyflux assets able to withstand a 10% haircut and their ability to service the interest over the next 10 years. From its financial results, my answer is it is possible to pay its interest on bonds and distribution to perpetual share holders.
The situation is similar to Epicentre's recent junior (unsecured ) bond. 1) Bondholders are likely to be able to get a majority of their proceeds, 2) shareholders are likely to suffer or even to an extent enjoy dividends but a permanent loss on their initial invested capital