The High Court has extended Hyflux's debt moratorium by 4½ months to April 30 despite arguments from some bank creditors that the insolvent water treatment firm should be kept on a tighter leash.
Justice Aedit Abdullah granted Hyflux the extension after hearing from lawyers for the firm and its unsecured working group of creditors yesterday.
BNP Paribas, Mizuho Bank, KFW IPEX-Bank, Bangkok Bank and Standard Chartered Bank had argued for the moratorium to be extended to Jan 16 only. They said Hyflux's own restructuring timetable meant it should be clear by mid-January regardless of the company's ability to get all creditor groups on board.
Lawyer Eddee Ng of Tan Kok Quan Partnership argued: "It shouldn't have to be the case that the (creditors) need to come to the court to get the moratorium lifted (if) this entire restructuring process is a no-go. It's the company that should come to the court and (the) company should be kept on a very tight leash in so far as time is concerned."
The informal steering committee of Hyflux medium-term note holders took the same position.
But WongPartnership lawyer Manoj Sandrasegara, who represents Hyflux, argued for more time, saying: "I think it's quite hard for us to do negotiations with a gun to our heads, on the basis that you only have a month and a bit to get the deal done."
He asked for court protection to be extended until April 30. That is the same long-stop date fixed by the Salim-Medco consortium, which has offered to come in as a strategic investor.
The judge agreed. Hyflux's next case conference will be held in the week of Jan 21 at the latest. Creditors can raise concerns they may have on the continuing operation of the debt moratorium at that time, he said.
"The court... is (mainly) concerned about the propriety of the sanctioned schemes of arrangement, and the scope for the court to go into questions of substance of any kind isn't really that wide."
He also urged Hyflux to address retail investors' concerns during discussions and townhall meetings that are expected to be conducted as early as January.