(Jan 30): Singapore’s highest-profile distressed company, Hyflux, faces more woes after its legal adviser said it plans to walk off.
WongPartnership LLP has expressed its intent to resign from the case due to “loss of confidence in a good cause,” Singapore high court judge Aedit Abdullah said Wednesday in a hearing where Hyflux sought to extend its debt moratorium by three months.
That forced the court to adjourn the hearing to Feb 20, while asking for a reconciliation between WongPartnership and the company, if possible.
“On Feb 20, we will be before the judge for a formal discharge,” Manoj Sandrasegara, a partner at WongPartnership, said in Wednesday’s hearing.
Later Wednesday, Hyflux said in a statement to the Singapore exchange that “it has lost confidence and trust” in WongPartnership.
Hyflux’s fall has left some 34,000 retail investors in the lurch. The case shows few hints of resolution after more than 18 months under court supervision.
Hyflux will have to appoint a new legal adviser if it can’t resolve the dispute with WongPartnership. The court cited a point under Singapore’s legal professional conduct rules that allows a law firm to withdraw from representing a client in a case where “there is a serious loss of confidence” between them.
Meanwhile, the court extended Hyflux’s debt moratorium by a month to Feb 28.
The drawn-out process is causing angst among Hyflux investors. Middle Eastern utility Utico FZC, which reached a pact in November to rescue Hyflux, has already expressed frustration over the delay in closing the deal. It has threatened to walk away if it can’t win investor support for its offer.
Investors have been left facing more uncertainty after a mystery rival suitor called Aqua Munda made a surprise offer last month to buy the company’s debt. As the two companies are locked in a battle for control of Hyflux, there’s still no clear timeline on when the debt of the noteholders will get settled.
