25-06-2018, 08:49 AM
I have 2 points to share :
1. If Hyflux had remained just a specialist turnkey EPC contractor - i.e. do the design/engineering work and build to the required specs, and after that get paid for most of the agreed contract value of the individual projects - for water projects, the risk profile of the business would be much lower, the management of the business less complex, and the capital and external borrowings required much smaller. This point actually concerns the CEO Olivia Lum's vision, business competence/judgement, and personal ego.
2. If Hyflux had not borrowed so much - including taking up excess subscriptions of its perp and other debt market issues - and from fancy financial instruments like preps, pref share, bond/note issues not linked to underlying projects, etc., and as a result created for itself a highly complex and huge senior-plus-junior debts funding structure, the current financial restructuring exercise would not be necessary at all. This point actually concerns the CFO Lim Suat Wah (joined Jan2011) who, based on the various fund-raising exercises undertaken by Hyflux since 2011, IMHO has not displayed the necessary financial prudence in managing the financial affairs of the Hyflux Group in the last few years. In this regard, the IDs are also responsible.
1. If Hyflux had remained just a specialist turnkey EPC contractor - i.e. do the design/engineering work and build to the required specs, and after that get paid for most of the agreed contract value of the individual projects - for water projects, the risk profile of the business would be much lower, the management of the business less complex, and the capital and external borrowings required much smaller. This point actually concerns the CEO Olivia Lum's vision, business competence/judgement, and personal ego.
2. If Hyflux had not borrowed so much - including taking up excess subscriptions of its perp and other debt market issues - and from fancy financial instruments like preps, pref share, bond/note issues not linked to underlying projects, etc., and as a result created for itself a highly complex and huge senior-plus-junior debts funding structure, the current financial restructuring exercise would not be necessary at all. This point actually concerns the CFO Lim Suat Wah (joined Jan2011) who, based on the various fund-raising exercises undertaken by Hyflux since 2011, IMHO has not displayed the necessary financial prudence in managing the financial affairs of the Hyflux Group in the last few years. In this regard, the IDs are also responsible.