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Hyflux restructuring plan
17 Feb 2019 (1595 views)

REVISED (2):

Hyflux has presented its restructuring plan for approval by the Court. See here.

I present my calculations here.


Based on the sum of $400 million paid by the Salim Medco consortium for a 60% stake, Hyflux is valued at $667 million after the restructuring.
 
  Shares Value Cash Total Debt %
Salim Medco Consortium 60% $400   $400    
Unsecured creditors 27% $180 $232 $412 $988 41.7%
Perpetual sec, pref shares 10.26% $68 $27 $95 $900 10.6%
Balance 2.74% $18   $18    
Unsecured contingent creditors       $915  
  100% $667   $667    

The unsecured creditors are given shares and cash worth $412 million, i.e. 41.7% of the total of $988 million owed to them. The perpetual security and preference shareholders are given shares and cash worth $95 million, or 10.7% of the total of $900 million that they have invested.

The restructuring will leave the company with assets and be free of debt. How much are the assets worth?

Here is the 2017 financial report.

The total assets of Hyflux is $3.6 billions of which $1.5 billion is assets held for sale (i.e. TuasSpring). The value of $667 million represents 18.5% of the total assets  or 31.7% of the assets excluding assets held for sale.

I am surprised that Temasek Holdings does not make a bid for Hyflux. The value offered by the Salim Medco consortium represents only 18.5% of the value of the total assets. Surely, Temasek should be able to offer twice the price, and still get a good deal, i.e. they only pay 37% of the value of the assets.

Tan Kin Lian

Hyflux restructuring plan
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REVISED (2):

Hyflux has presented its restructuring plan for approval by the Court. See here.

I present my calculations here.


Based on the sum of $400 million paid by the Salim Medco consortium for a 60% stake, Hyflux is valued at $667 million after the restructuring.
 
  Shares Value Cash Total Debt %
Salim Medco Consortium 60% $400   $400    
Unsecured creditors 27% $180 $232 $412 $988 41.7%
Perpetual sec, pref shares 10.26% $68 $27 $95 $900 10.6%
Balance 2.74% $18   $18    
Unsecured contingent creditors       $915  
  100% $667   $667    

The unsecured creditors are given shares and cash worth $412 million, i.e. 41.7% of the total of $988 million owed to them. The perpetual security and preference shareholders are given shares and cash worth $95 million, or 10.7% of the total of $900 million that they have invested.

The restructuring will leave the company with assets and be free of debt. How much are the assets worth?

Here is the 2017 financial report.

The total assets of Hyflux is $3.6 billions of which $1.5 billion is assets held for sale (i.e. TuasSpring). The value of $667 million represents 18.5% of the total assets  or 31.7% of the assets excluding assets held for sale.

I am surprised that Temasek Holdings does not make a bid for Hyflux. The value offered by the Salim Medco consortium represents only 18.5% of the value of the total assets. Surely, Temasek should be able to offer twice the price, and still get a good deal, i.e. they only pay 37% of the value of the assets.

Tan Kin Lian
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