Hyflux and units seek to extend debt moratorium by 3 months

Hyflux and three of its subsidiaries have asked the High Court for an additional three-month reprieve from its creditors as it works on another plan to avoid liquidation.

The applications will be heard tomorrow, just days before its court-sanctioned protection from creditors expires next Tuesday. If granted, the debt moratorium will be extended to July 30, it announced yesterday.

The applications were filed by Hyflux, Hydrochem, Hyflux Engineering and Hyflux Membrane Manufacturing. The Hyflux Innovation Centre unit has not filed an application.

Hyflux also disclosed in its Singapore Exchange filing yesterday that it has received two claims, totalling US$65.03 million (S$88.2 million), from Tahlyat Myah Magtaa SpA (TMM), the project company for its Magtaa desalination plant in Algeria.

Hyflux said it disputes TMM's right to make these claims and is seeking legal advice.

Both claims are expected to have a material impact on the group's financial performance, it added.

Hyflux's advisers told Mr David Gerald, president of the Securities Investors Association (Singapore), on Monday that the company will need at least three months for its new plan to materialise.

 
 
 
 

Its plan to return to solvency is to keep perpetual and preference shareholders whole in its books as equity rather than debt.

This will be viable only if Hyflux's interest payments to its perp and pref holders are lowered or suspended for a number of years or perpetuity. No specific details have been released by Hyflux.

Hyflux is set to lose its largest asset, Tuaspring, an integrated power and water plant, after its planned rescue deal with Indonesia's Salim-Medco Investments fell through earlier this month.

National water agency PUB has issued a notice to seize the Tuaspring desalination plant, while secured lender Maybank intends to appoint receivers to the power plant.

Meanwhile, Hyflux has appointed dealmaker Nicky Tan to help it find a new investor.

A version of this article appeared in the print edition of The Straits Times on April 24, 2019, with the headline 'Hyflux and units seek to extend debt moratorium by 3 months'. Print Edition | Subscribe