Disgruntled by Hyflux’s rocky progress in the recent months following its restructuring plan, the homegrown water treatment firm’s investors have decided to take matters into their own hands by planning to stage a protest this Saturday (30 Mar).

The Straits Times reported that the protest, which will be taking place at the Speakers’ Corner in Hong Lim Park around 3pm to 4pm, will also entail an “appeal for goodwill” to national water agency Public Utilities Board (PUB).

The statutory board under the Ministry of Environment and Water Resources has recently announced its plans to take over Hyflux’s Tuaspring water desalination plant at “zero dollars” in addition to a waiver of any compensation sum stated in the Water Plant Agreement between PUB and Tuaspring Pte Ltd.

Alex Leong, a 43-year-old who has invested approximately S$100,000 in the firm to support its fundraising bid eight years ago, told ST that his application to organise the protest was approved by the police and the National Parks Board on Mon (25 Mar).

He added that the protest will very likely garner the support of many other Hyflux investors, as observed from “an interest poll” he had conducted a few weeks ago, according to ST.

Mr Leong also expressed his concerns over losing much of his investments, which were drawn from a large portion of his savings.

“Enough is enough. Many of us are fed up with the rubbish that we have been seeing about Hyflux,” he lamented to ST.

SIAS poses several questions to PUB regarding potential Tuaspring takeover 

Hyflux’s investors are not the only ones who are finding the firm’s tumultuous developments unsettling.

Securities Investors Association Singapore (SIAS) CEO David Gerald, in his letter to PUB on Tue (26 Mar), wrote that while “SIAS fully appreciates that PUB has to safeguard Singapore’s water security”, the Association has an obligation to “represent the interest of the investors, particularly the retail investors of Hyflux” who are facing anxiety over Hyflux’s possible liquidation.

Consequently, Mr Gerald has urged PUB to make clarifications regarding several issues surrounding the Board’s recent announcements “to avoid speculations and address the investors’ uncertainties and fears”.

Among the questions posed by SIAS were those regarding PUB’s role in managing the Hyflux crisis, and to what extent it can exercise its authority in the issue.

Mr Gerald wrote: “In exercising the default notice and acquiring TSDP, is PUB acquiring just the right to operate or the asset?

“Will PUB also acquire the power plant as it is integrated with the desalination plant?

“What is the plan for the power plant?

“Will PUB acquire the asset or the right to operate?”

He also raised the question of the Tuaspring desalination plant’s valuation process, and challenged PUB’s plan at taking over the plant for “zero dollars”, asking if the purchase price should instead be “the equivalent [of the] replacement cost of building or an equivalent plant”.

Mr Gerald had also asked PUB as to why it has “chosen to issue the notice of default” that has an expiry date of 5 Apr, the same date that Hyflux’s creditors will be casting their votes on the restructuring plan, “given that PUB was already aware” of Hyflux and Tuaspring’s financial status since 2017.

“NEA could have also issued a notice of default for the construction of Tuas One.

“Taking NEA as an example, why couldn’t PUB also wait till after the Hyflux scheme meeting to issue the default notice?

“Wouldn’t that be helpful to the plight of the 50,000 Singapore citizens who have ploughed their money into Hyflux to avoid further uncertainty?

“Couldn’t PUB have waited till the outcome of the restructuring, on how the default could be remedied. Could PUB have waited a little longer?” asked Mr Gerald.

Mr Gerald further questioned if the notice of default was given because the Tuaspring desalination plant “was not included as part of court sanctioned moratorium”.

SIAS also sought clarification from PUB as to whether the Board is willing to give Tuaspring Pte Ltd “more time” to “remedy defaults arising under the WPA”.

“If not, why? Wouldn’t giving more time help all parties to focus on the restructuring process?” probed Mr Gerald.

PUB confident in its “operational capabilities, experience and manpower” to run Tuaspring desalination plant

PUB also assured in its press release on Fri that it has “the operational capabilities, experience and manpower to run” the Tuaspring desalination plant.

As Singapore’s national water agency, PUB is responsible for managing the Republic’s water supply via the Four National Taps, namely local catchment water, imported water, NEWater, and desalinated water.

Independent energy consultant Martin van der Lugt told The Business Times that while “PUB taking over the desalination plant makes sense”, Tuaspring in itself “is still worth very little”.

“I can’t see the margins improving before 2023, and after 2023 it is yet to be seen that the situation improves.

“The fact remains that there is too much CCGT (combined cycle gas turbine) generation capacity competing for market share,” stressed Mr van der Lugt.

Hyflux, drowning in S$2.7 billion in liabilities as of the end of Sep, stands to lose out on a “$380 million rescue package” from Salim, which was offered “in exchange for a 60% stake” in the water treatment company.

Should Salim proceed with cancelling the agreement, Hyflux may end up being liquidated, unless it is able to secure a new sponsor “before the end of a debt moratorium granted by the court” at the end of next month.

Currently, the fate of the company’s debt restructuring plan partially rests in the hands of its creditors as they await the voting process, which will take place in a meeting on 5 Apr.

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