Hyflux creditors asked to file proof of claims by Feb 15
To those upset by the timing, Hyflux says the law calls for this to be done at the time of restructuring.
Hyflux's ongoing restructuring process threatens to be a complex one for several reasons, including that of its stakeholders' confusion over the filing of proof of claims.
The water-treatment company on Friday called on its creditors to file their proof of claims ahead of scheme meetings. The proofs, which will form a basis to vote on scheme proposals and to receive payments, have to be submitted by 5pm on Feb 15.
But for holders of the company's bonds, perpetual securities (perps) and preference shares, their holdings as recorded by the Central Depository (CDP) will be treated as proofs, even if these holders do not file their claims, Hyflux said in the filing.
Any party who is required to but does not file a proof of claim by the deadline will be barred from voting at scheme meetings and may not be entitled to any payments, subject to the discretion of the proposed chairman of the scheme meetings, said Hyflux.
The company told The Business Times that the law requires claimants to file proof. However, those who do not do so - and if their securities are reflected in their CDP records - will be deemed to have authorised Hyflux to file a proof on their behalf, based on the holdings.
Hyflux rubbished the claim that the requirement of filing proof of claim was to disqualify more retail investors from voting: "No holder of perpetual securities, preference shares or notes will be disqualified from voting."
Under the enhanced restructuring regime in Singapore, the holder of a claim that is to be included under a restructuring proposal is required to file proof of claim before he or she is entitled to vote on the restructuring proposal in respect of that claim.
Further, the exercise will give all claimants the opportunity to verify their holdings and claims against the records available to Hyflux.
In other words, those who hold Hyflux bonds, perps or preference shares in their CDP accounts can choose not to take any action where filing of proof is concerned.
Investors who are holding the securities through nominees do not need to file a proof of claim themselves, but may instruct their banks to get their respective nominees to file the proof.
"Only their nominees can file a proof of claim on their behalf. Otherwise, they can just leave it to the company to admit a claim on their nominee's behalf, based on CDP's records," Hyflux told BT.
A Standard Chartered Bank spokesman told BT that investors can approach their relationship managers or the bank's 24-hour contact centre at 6747 7000 for assistance. "We will be able to verify their holdings and provide the necessary information."
The call for proof has caused quite a stir among holders of Hyflux securities. Some have been feeling lost and confused, and others are angry with the timing of the news, as well as the fact that the deadline is just two weeks away.
Violet Seow said: "I am so busy with spring cleaning, shopping... and am very distressed to see this announcement today... I am already very upset with having to lose my investments. I have to cut my ang pow and spending for this year's Chinese New Year. Hyflux (has) just rubbed it in by announcing this just when we are about to celebrate the Chinese New Year."
On its choice of timing, Hyflux said the law requires proofs to be filed only around the time the restructuring plan is proposed.
In the light of the intention to convene a scheme meeting at the end of March, Hyflux has now asked claimants to submit proofs.
OCBC Credit Research, in a report published on Friday, sees a diminishing likelihood of a smooth restructuring for Hyflux.
It said in its report that creditors will be willing to accept an offer if there is sufficient value to compensate all levels of creditors in some way or form.
"However, with asset values uncertain, a lack of updated financial information and a possible plan that includes equitisation, we think creditor willingness will be further compromised than it already is."
It noted that the diminishing prospects of a smooth restructuring has raised expectations by some of a government intervention.
However, the report pointed out that while Hyflux's business or industry is strategically important to the government, the company itself is not.
Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.