4/5/2019 More than 100 Hyflux investors protest at Hong Lim Park, Business News & Top Stories

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More than 100 Hyflux investors protest

at Hong Lim Park

Hyflux investors gathering at the Speakers’ Corner of Hong Lim Park yesterday. The water treatment firm
owes a total of $900 million to some 34,000 perpetual securities and preference shareholders. But
investors stand to suffer heavy losses from the company’s restructuring plan, which may see them
recover around 3 per cent in cash and 7 per cent in equity. ST PHOTOS: JASON QUAH

 PUBLISHED MAR 31, 2019, 5:00 AM SGT

Shareholders angered by firm's restructuring plan, PUB decision

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4/5/2019 More than 100 Hyflux investors protest at Hong Lim Park, Business News & Top Stories - The Straits Times


Grace Leong Business Correspondent (mailto:gleong@sph.com.sg)

More than 100 retail investors of Hyflux perpetual securities and preference shareholders - many of whom
were elderly, with at least one in a wheelchair - held a protest at Hong Lim Park yesterday against the
company's restructuring plan and recent developments involving the beleaguered water treatment firm.

Among them was 67-year-old retiree Koh Ah Kiw, who lost about $40,000 after investing in Hyflux
preference shares and perpetual securities to "get pocket money for retirement". She said she bought the
shares at $100 apiece and had been receiving dividends until they stopped last year.

Madam Koh, who was with the Ministry of Health for more than 42 years, said: "My daughter said I'm
unlucky. I also lost my $30,000 investment in Lehman Minibonds."

The former nurse from Changi General Hospital was also at Hong Lim Park to protest after the ill-fated
Lehman Brothers-linked Minibonds turned sour following the collapse of the United States investment
bank 10 years ago.

The collapse led to nearly 10,000 retail investors in Singapore losing most or all of their investments,
totalling around $520 million.

Madam Koh is among some 34,000 Hyflux perpetual securities and preference shareholders who are owed
a total of $900 million, but stand to get a recovery rate of 10.7 per cent - around 3 per cent in cash and 7 per
cent in equity.

ADVERTISING

Even though Hyflux has proposed to amend its scheme to offer them higher cash recovery rates, this
depends on whether all contingent claims are extinguished over a period of two years.

The Hyflux protest, which began at 3pm, saw organiser Alex Leong and former NTUC Income chief
executive Tan Kin Lian speaking to the company's investors, many of whom turned up to appeal to national
water agency PUB to consider compensating them out of "moral obligation or goodwill".

The protesters were also hoping to rally a "no" vote to Hyflux's rescue plan, and to get the authorities to
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4/5/2019 More than 100 Hyflux investors protest at Hong Lim Park, Business News & Top Stories - The Straits Times

Many of those who turned up yesterday saw it as a platform to vent their

frustrations, especially after the PUB said it would take over Hyflux's Tuaspring


desalination plant for zero dollars and waive the compensation sum it is entitled to,
if Hyflux does not fix its defaults by April 5.

investigate the company and its alleged mis-selling.

Opposition politician Lim Tean, a lawyer and founder of the People's Voice, Singapore's 11th political party,
was also at the rally.

Mr Leong, who was in a mask, said Mr Lim shook his hand and offered him legal services. Mr Leong added
that it was too early to determine the effect of the protest, if any.

But many of those who turned up yesterday saw it as a platform to vent their frustrations, especially after
the PUB said it would take over Hyflux's Tuaspring desalination plant for zero dollars and waive the
compensation sum the agency is entitled to, if Hyflux does not fix its defaults by April 5.

But on Friday, PUB extended the default notice period to April 30, subject to conditions.

Protesters at the rally displayed placards denouncing Hyflux's restructuring plan as a "beggar deal".

Related Story
Hyflux moves April 5 scheme meetings to larger
venue

Related Story

National water agency PUB gives Hyflux's
Tuaspring more time to remedy defaults

Related Story

Indonesian white knight SM Investments hits out
at Hyflux for not disclosing 'material

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4/5/2019 More than 100 Hyflux investors protest at Hong Lim Park, Business News & Top Stories - The Straits Times

information' earlier

But the $530 million lifeline thrown by Salim-Medco consortium SM Investments (SMI) - in exchange for a
60 per cent stake in Hyflux once all its debts are settled - is looking shaky.

This is after SMI said on Thursday that it did not agree to $271 million of its $530 million investment being
used to settle Hyflux's financial obligations, which include debt owed to the senior creditors and perpetual
securities and preference shareholders.

When asked yesterday, a Hyflux spokesman said: "We do not know what (SMI) says the cash amount to
settle financial obligations should be, as they have not told us what they are agreeable to."

But she added: "The revised scheme did not change the total cash being distributed, but provided for the
perpetual securities and preference shareholders to share in the cash pot allocated to the settlement of
contingent claims."

On the protest, Hyflux said it "understands the frustration and regrets the dissatisfaction that has caused
some stakeholders to protest".

"We hope that notwithstanding their disappointment in Hyflux, they will vote on the basis of what is
commercially and legally realisable in terms of recovery. Unlike in a liquidation, the scheme permits junior
ranking creditors to receive payment, even when the senior creditors are not fully paid," the spokesman
said.

COUPLE LOST $200K OF RETIREMENT FUNDS

Madam L.L. Hong, 53, and her husband, Mr B.C. Ong, 55, said they bought Hyflux perpetual securities and
preference shares because they thought Tuaspring was a "strategic national asset".

Instead, they have lost more than $200,000 of their retirement funds.

The couple were among those who turned up for yesterday's protest at Hong Lim Park to show their
support for the "no" vote to Hyflux's restructuring plan on Friday.

Madam Hong, 53, said: "I'm voting 'no' on April 5. If someone takes away your money and then gives you
back 3 per cent, and tells you that you should be very thankful, how would you feel?

"I can't believe they are telling us that something is better than nothing... Please don't insult us further."

She believes that SM Investments (SMI) may be backing out of the deal but may wait for the vote's
outcome.

"This is so that Salim(-Medco) can legitimately say people voted no, so give me back my escrow money,"
she said.

Hyflux warned last Thursday that if SMI were to "wrongfully terminate" the agreement, the water treatment
firm would be able to lay claim to the $38.9 million deposit taken out of SMI's proposed investment that
was placed in escrow.
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4/5/2019 More than 100 Hyflux investors protest at Hong Lim Park, Business News & Top Stories - The Straits Times

Even if voting "no" meant that would damage their chances of recovering a portion of their investment, Mr
Ong seemed determined.

"What's the difference between getting 3 per cent (in cash recovery) and not getting it? If we sink, then we
sink together," he said.

TEMASEK INVESTED, SO COUPLE DID SO TOO

For Madam B. Chua, 62, the $6,000 loss from her investment in Hyflux perpetual securities was just "a
forgone holiday".

But she said she understood the pain felt by many retirees at the Hong Lim protest yesterday. Her husband,
who was not at the rally, had lost under $100,000 of his investment.

"Many of us had kept quiet initially. But I felt I had to come to the protest. We must voice that we do care,"
Madam Chua said.

"We invested in Hyflux because government support for the company was very strong. We invested
because Temasek had invested. And Temasek must have done its due diligence."

Temasek is a national investment company.

But she also acknowledged that Temasek had reduced its stake in Hyflux. By 2006, Temasek was no longer
on the list of Hyflux's top 20 shareholders.

"When banks sold the securities to us, they told us 'Temasek invested, so don't worry. And if you don't buy,
somebody else will,'" Madam Chua said.

"Investors went in because it was a national asset."

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