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Old 26-02-2019, 10:50 PM   #2210
NicolasTeo
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Join Date: Jan 2019
Posts: 7
‘Don’t vote in anger,’ says SIAS as distressed Hyflux retail investors start petition
Updated: 26 Feb 2019 08:00AM

Source: CNA/sk(mn)
Interesting that SIAS says don't vote out of anger. I would have said don't vote out of fear. Probably both are right.

Assuming the Salim deal is not voted for, what is Maybank going to do? Try to seize the Tuas plant and liquidate Hyflux? If yes, then it is already published elsewhere that the Offtaker can step in to seize the Tuas plant, and will Maybank then be at their mercy how much to receive?

Even if Maybank or the Offtaker seize the Tuas plant what will they do? Incur $80m loss every year in place of Hyflux shareholders? Do they really want that?

Not to mention that upon liquidation all the matters discussed by SIAS regarding whether whether past dividends were rightly paid, may surface in court. Absent liquidation, all that is merely speculative theory because in hindsight, it was rightly decided that the company does not become insolvent as a result of those dividends.

And in liquidation, will Tuaspring set the tone for the 4th and 5th desalination plant bidding process? Will the hurdle investment rate for future plants become higher thanks to a precedent failure? Will Tuaspring be the catalyst for a neighbor seeking higher returns on raw water sales?

If the Salim deal is not voted for, it seems to me the only rational recourse for everyone, whether Offtaker, Maybank or other creditor, is to try and reach another more favorable deal, not liquidate.

Still, there is no guarantee that anyone will do anything rationally, so some risk involved in voting "out of anger".

But it seems to me the more irrational approach in this case, is to vote "out of fear".
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