Hyflux gets third deadline extension to find Tuaspring buyer

Hyflux's Tuaspring desalination plant. Among other developments, two white knights from Indonesia have floated a $400 million equity injection in Hyflux, in exchange for a 60 per cent stake in the company.
Hyflux's Tuaspring desalination plant. Among other developments, two white knights from Indonesia have floated a $400 million equity injection in Hyflux, in exchange for a 60 per cent stake in the company.PHOTO: HYFLUX

Hyflux has got its third extension of a deadline to find a buyer for its loss-making Tuaspring water and power plant, the cash-strapped firm said yesterday.

Major lender Maybank, which is Tuaspring's only secured creditor, has agreed to push back the deadline from Nov 29 to Dec 28.

Hyflux originally had until Oct 15 to execute a binding agreement with a successful bidder or investor for Tuaspring in a deal reached with Maybank in July.

The lender had agreed at the time to hold off on enforcement proceedings against Tuaspring, its properties and its assets.

While Maybank has now given its in-principle approval for the extension, the terms of the agreement still apply, including Maybank's right to terminate the collaboration deal if the new deadline is breached, Hyflux noted yesterday.

The restructuring initially came up against founder Olivia Lum's preference for divesting Tuaspring at no less than its book value, or $1.47 billion, as of March 31.

State-linked Sembcorp Industries was the only approved bidder for the project, with Bloomberg reporting that the offer was under book value.

Meanwhile, two white knights have floated a $400 million equity injection, in exchange for a 60 per cent stake in Hyflux.

Indonesia's Salim Group and Medco Group also offered a $130 million shareholder's loan and a debtor-in-possession loan of $30 million in October's rescue plan.

Hyflux has said that, in the light of this bailout offer, a voluntary sale of Tuaspring will no longer be actively pursued.

According to its website, Hyflux is working with the Salim-Medco rescue consortium, SM Investments, to talk to Maybank about this.

A version of this article appeared in the print edition of The Straits Times on December 05, 2018, with the headline 'Hyflux gets third deadline extension to find Tuaspring buyer'. Print Edition | Subscribe