Hyflux in talks with investors as deadline over debt nears

The survival of the insolvent water project developer Hyflux could hinge on whether any strategic investors come through as it nears the Dec 19 deadline when its debt moratorium will be lifted.

WongPartnership partner Manoj Sandrasegara, who represents Hyflux, told a Singapore High Court yesterday that the firm had "spent a lot of time" meeting investors last month to discuss deal terms.

He mentioned two parties, but declined to reveal their identities.

If Hyflux can hammer out a deal with potential strategic investors, then it will know how much of the debt can be paid in full and start negotiating the terms of a restructuring with creditor groups.

Mr Sandrasegara added: "I know the company has come under some criticism from creditor groups that information disclosure has been slow, but the company has to prioritise things like the stabilisation of the business, preparing data rooms for DIP (debtor-in-possession) financiers, and getting the TuasOne and Qurayyat projects going."

Justice Aedit Abdullah said at Hyflux's case management conference yesterday that he would need some convincing if the firm asked to extend the debt moratorium for a further six months.

He said: "I will need very strong reasons because you have had six months and some investors are getting quite skittish, given how things are going."

If Hyflux can hammer out a deal with potential strategic investors, then it will know how much of the debt can be paid in full and start negotiating the terms of a restructuring with creditor groups.

Mr Sandrasegara said he hoped "to see a binding term sheet (with an investor) executed subject to a scheme of arrangement with creditors" by the end of December.

"If we move at great speed and creditors are agreeable, we could have an in-principle agreement that can be put to a vote by creditors... I don't think we can get a scheme signed and sanctioned before the moratorium ends."

Meanwhile, Maybank, Hyflux's largest secured lender, had earlier agreed to give it until Oct 15 to find a buyer for the Tuaspring integrated water and power plant and ink a binding purchase agreement.

Reportedly, Sembcorp Industries was the only party to submit a final bid by an Oct 1 deadline.

A version of this article appeared in the print edition of The Straits Times on October 09, 2018, with the headline 'Hyflux in talks with investors as deadline over debt nears'. Print Edition | Subscribe