facebookFor the layman and woman on the street, how does one avoid another Hyflux incident? - Seedly


18 Apr 2019


For the layman and woman on the street, how does one avoid another Hyflux incident?

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03 Apr 2019

Development & Acquisitions Manager at Real Estate Private Equity

I indeed am one of the investors caught in the whole Hyflux incident. A mistake on my part was not doing my due dilligence when they issued a second round of 6% Perpetual Securities. It was debt building on debt yet I still went to apply for it. I had the mindset that Hyflux had never once forfeited its payments since the first day of its Cumulative Preference Share. But alas, if I had done my homework, I would've noticed its negative cash-flow partially due to its overly rapid expansion leading to its unsustainable business model adding on it's already high OPEX.

Somtimes I guess lessons have to be learnt the hard way. Swiber, Noble, Hyflux, Rickmers, its good to read up on their downfall so one wouldn't be in the footsteps of these investors

I avoided Hyflux after seeing one of its bond issuance. Reason being, they issue the bond to pay for a previous tranche of bonds. To me, this highlights that the company is having cashflow issues.

Think of it this way, your friend borrowed from another friend $475 and five years later, he borrowed $500 from you to pay off this other friend. Would you have lent him/her?

If no, then multiple that by 1million and that‘s what Hyflux did.

Always know what the company is planning if they intends to take on more debt, whether it us to open more branches or expand overseas, and whether it makes sense. Do your own due diligence too.

Nicholes Wong

03 Mar 2019

Diploma in Business Management at Nanyang Polytechnic

People who get hit the worse are people who went almost all in. You should never go all in on an inv...

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