SINGAPORE, Oct 9 — Beleaguered water-treatment firm Hyflux is in advanced talks with two potential strategic investors and has separately received eight expressions of interest from prospective rescue financiers.
These details emerged in an affidavit by its founder Olivia Lum, which was released by the company yesterday (Oct 8), as well as from a status conference held on the same day in the High Court. The conference was part of the court’s requirement for granting the firm a six-month debt moratorium in June.
The court heard yesterday that Hyflux is in talks with several potential strategic investors, and it aims to conclude advanced discussions with two of them before entering a final agreement in early November, subject to court approval.
The court scheduled a further status conference that will be fixed for the week of Nov 19, and also directed Hyflux to provide an interim update on the progress of its re-organisation efforts on Oct 31.
The beleaguered firm, once the darling of successful entrepreneurship in Singapore, is undergoing a court-supervised re-organisation after chalking a debt of S$2.95 billion (RM8.87 billion) as of March 31.
To repay its creditors, it is looking to sell its Tuaspring project — a water desalination plant with a gas turbine power plant which costs more than S$1 billion to build.
The company has until Oct 15 to ink a deal for its single largest asset, as part of an agreement with its only secured creditor Maybank.
“The Hyflux Group is exploring all options, including trying to increase the number of pre-qualified parties, so as to optimise competitive tension to improve the realisable value of Hyflux’s interest in Tuaspring,” said Lum in her affidavit.
Hyflux is also trying to raise S$200 million in rescue financing to see through ongoing projects, such as the TuasOne waste-to-energy (WTE) plant and an independent water project in Qurayyat, a small fishing village in Saudi Arabia.
Lum’s affidavit, which was her third, showed that all eight potential rescue financiers have submitted non-binding expressions of interest.
The expressions of interest set out the amount they are willing to pay, the types of security they are looking to obtain in return for the money, their expected interest rate, and information they expect to receive to come up with a rescue financing proposal.
Hyflux expects to enter into a final agreement with the interested parties, subject to court approval, in October 2018.
It was also revealed in the affidavit that the expected completion date of the TuasOne WTE project has been pushed back by four months, from the previously announced May to Sept 2019.
Lum, who is Hyflux’s executive chairman and group chief executive officer, said that the delay was caused by the lack of funds to maintain the usual level of construction activity to meet the original schedule.
Several third-party suppliers and sub-contractors have either stopped work or reduced the number of workers in specialised roles, such as those in electrical works, insulation works, as well as fire protection system.
There were also some who would only supply materials or provide services when they have received advance payments, she added. — TODAY
