In a media report by state media Straits Times yesterday (Oct 3), the wife of corrupted dictator Prime Minister Lee Hsien Loong, Ho Ching, has authorised her subsidiary Sembcorp to bail out her friend Olivia Lum’s beleaguered company Hyflux – using more than S$1 billion.
Sembcorp was revealed to have put in the only offer in a tender for the S$1.47 billion water desalination plant, Tuaspring. Temasek Holdings and its subsidiary Sembcorp – fully funded by its seed fund government taxes – put up the bid to save Hyflux from bankruptcy.
According to an earlier court protection order hearing lodged by Hyflux to prevent its bankruptcy, the CEO of Hyflux Olivia Lum boasted about having “8 interested parties” for its Tuaspring plant and that “bids should not be so low” that Hyflux could not pay back its debt. This turned out to be an exaggerated claim as proven yesterday, with only Sembcorp placing in a bid.
Hyflux is currently swimming in a S$2.95 billion debt, no thanks to the company’s reckless borrowings and issuance of company bonds, with a ridiculous return rate of 6% in the current low-interest rate environment. The Tuaspring plant is only expected to provide half the relief at S$1.47 billion, but it remains insolvent.
If Hyflux does not show progress in reducing its nearly three billion dollar debt, its 6-month court protection order will expire in two months’ time on January 2019. The company will be formally bankrupted, but it is unlikely to happen as the Singapore government has been subtly trying to assist Hyflux by raising electricity tariff prices. To-date, the electricity tariff was increased by a whopping 18.8% in 2018 – with more increases expected in 2019 following rising energy prices.
Like Hyflux, Temasek Holdings is also likely to become insolvent with a debt of S$49.7 billion issued in bonds of different currencies. However unlike Hyflux, the CEO of Temasek Holdings does not sleep with the Prime Minister and that Ho Ching has proven to be “immune” to criticisms and poor performance. Her dictator PM husband had in the past released undisclosed amount of government funding from the Ministry of Finance to boost Temasek Holdings’ portfolio.