Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Hyflux — Debt Investor Presentation (January 2019)
42 slides from Singapore Exchange's debt investor presentation, Jan 18, 2019
Slide 1: 18 January 2019
18 January 2019 Facilitated and Moderated by: Attended by:
Slide 2: Important Notice
Important Notice • This informal meeting is being convened for the purpose of providing the Group’s securities holders with an update on the financial position of the Group and the next steps in the reorganisation process. • Kindly note that: – The informal meeting is not intended to and does not am
Slide 3: Disclaimer
Disclaimer • Certain statements in this presentation may constitute forward looking statements. Forward looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statement
Slide 4: Disclaimer (continued)
Disclaimer (continued) • Given the risks and uncertainties that may cause the actual future results, performance or achievements of the Company or the Group to be materially different from the results, performance or achievements expected, expressed or implied by the financial forecasts, profit proj
Slide 5: Meeting Protocol
Meeting Protocol • Without prejudice • Informal meeting • No recording or photo taking • Identification for Q&A 5
Slide 6: Agenda
Agenda 1. Update on reorganisation 2. Strategic investor 3. Liquidation analysis 4. Restructuring process going forward 5. Salim/Medco consortium presentation 6. Timetable and next steps 7. Q&A 6
Slide 7: Update on reorganisation process
Update on reorganisation process 7
Slide 8: Court-supervised reorganisation process
Court-supervised reorganisation process • Scope of the moratorium under s211B: – Limited to 5 companies (the “Applicants”) of the Hyflux Group – No legal proceedings can be commenced or continued against the Applicants – No enforcement steps can be taken against the Applicants or their assets • Why
Slide 9: Actions taken since Town Hall on 19 July 2018
Actions taken since Town Hall on 19 July 2018 Ongoing Stakeholder Capital Structure Stabilisation Management • Short term liquidity • Financial creditors • Asset sale management processes (PT • Trade creditors Oasis & Tuaspring) • Unlocking liquidity for construction • Project stakeholders • Rescue
Slide 10: Asset sales
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Slide 11: Asset sales
Asset sales Tuaspring: • Ongoing sale process with support from the secured lender, Maybank (consensual sale process commenced in July 2018) • The investment by SMI is premised on Tuaspring remaining part of the Hyflux Group • On a standalone basis (i.e. as not part of the wider restructuring for th
Slide 12: Asset sales (continued)
Asset sales (continued) PT Oasis: • Hyflux’s 50% interest in PT Oasis (Indonesian consumer products business) was sold in November 2018 for a net consideration of S$30.4m • Proceeds are being used to support ongoing operations and alleviated the immediate cash needs and the requirement for rescue fi
Slide 13: Strategic investor
Strategic investor 13
Slide 14: Strategic investor
Strategic investor • Following the initial stabilisation phase post Moratorium, the primary focus was on searching for strategic investors • Key investor categories considered included: – Chinese strategic investors – SEA conglomerates – US and European strategic investors – Private Equity • 16 NDAs
Slide 15: Strategic investor (continued)
Strategic investor (continued) • Offers ranged from a total investment (equity and shareholders loan) of S$400 million to S$600 million. • Equity portion ranged from S$250m to S$432m for equity stakes ranging from approximately 51% to 86.4%. Structures varied. • Following a careful assessment by the
Slide 16: Strategic investor (continued)
Strategic investor (continued) • The investment seeks to deliver significant long term strategic value to both the Hyflux Group and its stakeholders and contemplates: – An equity investment of S$400 million for 60% equity in Hyflux Ltd; and – A shareholder’s loan of S$130 million – If required, SMI
Slide 17: Strategic investor (continued)
Strategic investor (continued) • Key conditions precedent to completion of the investment: – Full and final settlement of Unsecured Financial Debt, Debt Securities (Perpetual Securities and Preference Shares), Contingent Debt and Trade Debt through court sanctioned Schemes of Arrangement or amendmen
Slide 18: Liquidation scenario
Liquidation scenario 18
Slide 19: Liquidation scenario
Liquidation scenario • Analysis by legal entity • Large group of c.120 legal entities with an extensive intra-group balances • Necessarily assumptions based analysis – key assumption is the main EPC business would cease activity while many of the project owning entities would remain outside of insol
Slide 20: Hyflux Ltd. capital structure in a liquidation
Hyflux Ltd. capital structure in a liquidation Stakeholder class Stakeholder type Estimated Hyflux Ltd. Liability Bank creditors $717m Noteholders $271m Senior unsecured obligations Contingent creditors $915m Total $1,903m Perpetual security holders $500m Subordinated Preference share holders $400m
Slide 21: Liquidation scenario (continued)
Liquidation scenario (continued) Applicant entity Senior unsecured obligations Low case High case S$m % S$m % Hyflux Ltd 74.5 3.8% 170.8 8.7% The above returns are expected to be available in a liquidation scenario 21
Slide 22: What the restructuring will involve
What the restructuring will involve 22
Slide 23: What the restructuring will involve
What the restructuring will involve • Restructuring to be effected via a Scheme of Arrangement which stakeholders whose obligations are affected will vote upon • Hyflux Scheme to include the following classes of stakeholders: – Unsecured financial creditors – banks and noteholders – Contingent credi
Slide 24: What the restructuring will involve (continued)
What the restructuring will involve (continued) • The Proposal includes a cash and equity component offered in return for extinguishing existing securities – allowing a partial return now and participation in the business going forward 24
Slide 25: SMI presentation
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Slide 26: Salim-Medco Group
Salim-Medco Group This document contains certain results of operation, and may also contain certain projections, plans, strategies, policies and objectives of the Company, which could be treated as forward looking statements within the meaning of applicable law. Forwards looking statements, by their
Slide 27: Salim Group Overview
Salim Group Overview Largest player in various industries including One of the largest conglomerate in Asia infrastructure, Electricity distribution with over US$50 billion worth of and generation, toll road operator, Water investment treatment and distribution, light rail Proven track record to gro
Slide 28: Salim Group's Water Business
Salim Group’s Water Business Philippines Indonesia 1. Owns Maynilad Water Services, Inc. the water and 1. Owns majority shares of Moya Holdings Asia Ltd (MHAL), the wastewater services provider in Greater Metro largest water treatment plant company in Jakarta Manila area with concession area of 540
Slide 29: Salim Group's Energy Business
Salim Group’s Energy Business Manila Electric Company (Meralco) 1. Largest private sector electric distribution utility company in the Philippines covering 36 cities and 75 municipalities including Metro Manila 2. Franchise area of over 9,685 km2 and serving over 6.5 million customers 3. Power gener
Slide 30: Medco Overview
Medco Overview Oil & Gas Power Mining • 10 operated Indonesian assets, 8 producing – Net ~84 MBOEPD as • Independent Power Producer • Batu Hijau open pit porphyry copper and of 9M18 (IPP) for 9 operated Indonesian gold mine, Sumbawa Indonesia • ~67:33 gas to oil production assets with 645 MW gross •
Slide 31: Energy & Natural Resources Company Focused in Indonesia
Energy & Natural Resources Company Focused in Indonesia Block A South Natuna Senoro-Toili Block Batu Sea Block B Bengara Block Hijau Nunukan • MEB • DEB South Sokang Tarakan Block • TM2500 Block • ELB Simenggaris Block Riau CCPP International Assets Rimau Block South Sumatra Block Lematang Block • M
Slide 32: West Natuna Transportation System Pipeline Infrastructure
West Natuna Transportation System Pipeline Infrastructure WNTS is owned and operated by Medco and supplies gas from 3 PSCs 1. Block B operated by Medco 2. Block A operated by Premier Oil 3. Block Kakap operated by Star Energy 32
Slide 33: Medco Offshore Operatorship in South Natuna
Medco Offshore Operatorship in South Natuna South Natuna Sea Block B - Offshore Facilities 33
Slide 34: Medco Power
Medco Power Focusing on Independent Power Producer and Operation & Maintenance Businesses INDEPENDENT POWER Renewable PRODUCER Energy Gas Powered Electricity Electricity Generation: Generation Geothermal & Hydro Operations & POWER PLANT Maintenance SERVICES Services 645 MW IPP Operating Asset, 2,489
Slide 35: Medco Power Footprint
Medco Power Footprint TM2500 Gas 75 MW MEB Gas 85 MW Duri Batam Island 3,134 MW (gross) in IPP and TM2500 Gas 75 MW DEB Gas 85 MW O&M Paya Pasir Batam Island with ~1,500 employees TM2500 Gas 20 MW Sarulla Geothermal 330 Batam Island MW Riau CCPP 275 North Sumatera MW Riau ELB Gas 76 MW Batam Island
Slide 36: Local Ownership
Local Ownership Group Group 60% 40% SM Investments Ptd Public Ltd 60% 40% Hyflux (SGX-Listed) 36
Slide 37: Business Plan
Business Plan Medium and Long-term Short-term Plan Plan 1. Rebuild Hyflux & new team 1. Explore synergies within the Salim and Medco • Reestablish Hyflux as a Leading Singapore Group Technology Company • Attractive EPC, project management, O&M Water treatment, Desalination opportunities available
Slide 38: Potential Synergies within Medco-Salim Group
Potential Business Synergies Potential Synergies within Medco-Salim Group EPC Consortium for Gas-Fired EPC Consortium for Smelter Power Plant Jakarta Township Water Bintan Waste-to-Energy Treatment Water Reservoir Development Batam Waste-to-Energy Other Synergies with Salim’s Other Synergies with Sa
Slide 39: Indicative timetable and next steps
Indicative timetable and next steps 39
Slide 40: Indicative timetable and next steps
Indicative timetable and next steps February • By mid-February: (a) restructuring proposal (scheme) to be proposed and (b) filing of application to court for convening the scheme meeting to vote on the restructuring proposal / scheme March • 13 March: Another series of town hall meetings for the hol
Slide 41: Q&A – moderated by SIAS
Q&A – moderated by SIAS 41
Slide 42: Thank You!
Thank You! Aytlux 42