Hyflux PUB should take over the Tuaspring integrated plant and the debt for $0
I have been following Hyflux closely, so I know some of the facts.  I hope that my comment below is accurate, constructive and helpful.

Hyflux spent more than $1 billion to build the integrated complex. It is funded by shareholder's capital and a loan from Maybank. (I have asked a knowledgeable person to check the facts for me).

PUB offered to take back the water desalination plant (but not the power plant) for $0 and to waive compensation. I do not know how much of the Maybank loan they are taking over. 

It is the power plant that is bleeding Hyflux. PUB is not taking that over. This is not helpful to Hyflux and to the retail investors. This arrangment is our locals call "pow chia" - i.e. take the good parts and leave out the bad parts. 

My suggestion is that PUB takes over the water plant, the power plant and the debt for $0.

Hyflux had an offer for Tuaspring (water plant and power plant) for a price lower than the debt. They rejected the offer. If PUB can take over Tuaspring and the debt, it will be better than the earlier offer. 

I am not asking PUB to bail out Tuaspring. I am asking PUB (and the govt) to recognize the part that they unwittingly played to destroy Hyflux (by asking the tenderer to guarantee the price of water for 25 years, "with no flow through on the cost of power".

PUB should not enjoy the full benefit of the mistake and bad business judgment made by the board and management of Hyflux and allow the retail investors to bear the brunt of the massive losses.

I state this with some caution. I do not know the full facts (which is why I asked someone to check for me).

Tan Kin Lian
 

Add Comment

---