Hyflux would-be rescuers have until Aug 3 to indicate interest

Hyflux had previously indicated that it is seeking about $200 million in rescue financing. PHOTO: LIANHE ZAOBAO

SINGAPORE - Hyflux is expecting net cash outflow in the short to medium term, and said 22 potential rescue financiers have been asked to submit expressions of interest by Friday (Aug 3), according to an update submitted by the water and power company to the High Court.

For the 13 weeks from July 30 to Oct 22, the group expects total net cash outflow of $22.25 million for the firm and its subsidiaries.

All in, Hyflux's net cash outflow for the six-month period ending December 2018 is estimated to total $43.2 million.

According to the group's own profit forecasts, Hyflux Limited is expected to record a post-tax profit of $6.22 million for the July to December 2018 period, while Hyflux Engineering's profit is estimated at $5.4 million.

Conversely, huge losses are expected from the rest of its key subsidiaries - Hydrochem (S) is expected to incur a six-month loss of $39.07 million, Hyflux Membrane Manufacturing is expected to lose some $13.34 million, and Hyflux Innovation Centre is expected to book a $248,000 loss.

Hyflux had previously indicated that it is seeking about $200 million in rescue financing.

As at July 31, 22 non-disclosure agreements (NDAs) have been signed with potential rescue financiers. Hyflux and its advisers have also held preliminary talks with 15 of these potential financiers, and intends to hold discussions with the rest.

A deadline of Aug 3 has been set for the potential rescue financiers who have signed the NDAs to submit expressions of interest which Hyflux will then review to shortlist suitable candidates to continue negotiations with.

Separately, Sembcorp Industries, Keppel Corp, and Malaysian generator YTL Power International Bhd are said to be interested in acquiring Hyflux's Tuaspring project, which includes South-east Asia's largest desalination plant, according to a Bloomberg report on Friday.

Tuaspring had a book value of $1.47 billion at the end of March, and sale of the asset could be the key to helping the cash-strapped company - which has $2.95 billion worth of liabilities - get back on its feet, Bloomberg added.

The company started a court-supervised reorganisation process in May, and has obtained a six-month debt moratorium.

Shares in Hyflux have been suspended, and last traded at 21 cents apiece on May 18.

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