SINGAPORE (Sept 30): Distressed water treatment company Hyflux has bought itself yet more time, after the High Court on Monday granted another two-month extension of its debt moratorium to Dec 2.
Hyflux and its three subsidiaries – Hyflux Engineering, Hyflux Membrane Manufacturing, and Hydrochem – had applied for the extension on the moratorium.
The reprieve will – once again – come as a relief for Hyflux, which is under intense pressure from creditors.
The extension will allow Hyflux to postpone debt payment even as creditors of the work on another plan to avoid liquidation.
See: Hyflux gets reprieve again; deals with potential investors yet to be settled
The company is weighed down by a debt load of $2.95 billion, including some 34,000 individuals who are looking to recover about $900 million in investments.
The company also faces possible probes by regulators into its stock market-related disclosures, as well as its compliance with accounting and auditing standards.
Just last week, Hyflux denied news reports saying it has signed a $535 million restructuring deal with United Arab Emirates-based utility provider Utico.
This is the fourth time Hyflux has been compelled to respond and clarify statements released by the potential white knight.
In a late Aug 28 evening filing with the Singapore Exchange, Hyflux says there are “certain final outstanding issues”, and that both parties are in “highly advanced discussions”. The company adds that it hopes to finalise and enter into a definitive agreement as soon as possible.
The debt-ridden water treatment firm earlier announced had received a non-binding letter of intent from Utico for a possible $400 million injection to be used for equity and working capital purposes as well as possible urgent interim funding.
The proposed investment will see Utico invest in an 88% stake in Hyflux for an investment amount comprising $300 million as equity and $100 million as a shareholder loan.
Utico has also informed Hyflux that intends to offer the cash equivalent of a 4% stake in the enlarged Utico group plus additional cash to the holders of preference shares and perpetual capital securities.
See: Hyflux could get $535 mil lifeline from white knight Utico
In a May 27 affidavit, Hyflux CEO Olivia Lum had said that, if all goes according to plan, the scheme meetings will be held in late August and the court-sanctioned restructuring process will be completed in September.
But, until now, the companies have struggled to come to an agreement.
See: Hyflux says 'progressing towards a deal' with Utico as binding agreement deadline lapses
Hyflux claims that other investors have also shown interest, including global multi-strategy investment fund Oyster Bay Fund, which is reported to have offered to invest up to $500 million in Hyflux.
In October last year, Hyflux managed to secure a white knight — SM Investments, an Indonesian consortium fronted by palm oil tycoon Antoni Salim.
SM Investments had agreed to pay $400 million for a 60% stake in the company and provide another $130 million in a loan.
But that deal fell through in April this year amid protests from minority shareholders and creditors. Both parties are suing each other for not living up to the agreement.
See: White knight SM Investments walks away from Hyflux rescue deal
