Hyflux

[sgdividends]

The bitter pill is:

1)Why were 6 bidders rejected by PUB who allowed only 2 local companies to bid. Sembcorp and Keppel. Sembcorp bidded below Maybank loan which is approx 500 mil. Keppel abstained.

But Salim  is allowed by PUBPto bid 400 million for controlling stake at the group level which includes Tuaspring , Singspring , Tuasone, e.tc?

I don't see any rationale but the effect is, the hampering of the bidding process would surely have resulted in a lower return to the investors . I am of the view that the Sembcorp deal is better than the Salim deal.

2) it was stated there was no default or a legal demand for payment , yet Hyflux entered into a voluntary court protection . To me, this was ill timed. CFO stated that before the court protection , the price talked about for Tuaspring was still around book value in Feb /march ( 1.3 billion ) . Court protection was seeked in may. September/Oct, it was then revealed that Sembcorp bidded and it was around  below 500 million. It is reasonable to think that the voluntary court protection resulted in this up to 800 million of value lost .
Why not wait till a legal demand of payment , fight in court, lost , then apply for court protection , at least there is more time to sell Tuaspring ...besides, entering court protection could have triggered more defaults and legal payments ....

3) OL stated she was given an 8 million projection and she therefore thought it was feasible with her advisors. This is such an irresponsible statement and up till now, there is no clarification.

4) it is very ridiculous when u look at the power market and why there is a glut in electricity and also why we are are seemingly enjoying low electricity prices up to 30% off ( or rather,whywe have been paying high electricity prices previously). This is a long story ....but is interesting to know.

Anyway, I have lost faith in our market, lost faith in SIAS.

When a company is allowed to conduct a Townhall under a without prejudice setting ( and it seems it quite common), irresponsible statements without accountability can be thrown about ..a complete waste of time

hi sgdividend,


(2) IMHO, the voluntary court protection was never a factor that affected the price of TS. TS was an "asset for sale" for ~1.5years on the balance sheet at 1.4bil and there was no takers. We could also debate about the "ill timing" but this is simply delaying the inevitable. Hyflux faces a solvency problem, not a liquidity problem. Only a liquidity issue is highly affected by timing, but a solvency issue for a company that runs on long lock-in period contracts will probably not be affected by timing.

https://www.valuebuddies.com/thread-810-...#pid148083

(3) We have seen too many cases where "advisors" are there to fill in the standard answer so that they will continue to get business/find favor with the one who pays for it.

(4) Keep your chin up. We need to take ownership of our losses. Faith, maybe was misplaced in the first place and it might eventually be a "blessing" to lose it. I finished reading this book recently and i would recommend it to you (It can also be borrowed at NLB)

https://www.amazon.com/Learned-Million-C...0231164688

Thank you Weijian for the reply .Always good to hear from you as I learn something everytime.

Regarding point (2) , whether it's a solvency or liquidity issue, I'm not sure but it was mentioned in the latest Townhall that it was a liquidity issue. But of cos , let's take what is beinf said with a pitch of salt...

But I do think that the voluntary court protection did affect because in the annual report 2017, under the auditors report page 55, it was mentioned 

"For Tuaspring, we reviewed management’s basis 
for the classification and examined supporting 
documents, including divestment plan and indicative 
bid received."

This meant there was a basis for the valuation for Tuaspring under assets held for sale. So the market price before the court protection shouldn't be so far off from the book value