SINGAPORE - Embattled water treatment company Hyflux has entered into new agreements that will help ensure the continued funding for the TuasOne waste-to-energy project, the company said in an exchange filing on Thursday (Dec 26).
The project has reportedly run out of funds, with Utico, Hyflux's white knight investor, offering to provide the funds needed to finish building TuasOne.
Hyflux has transferred the remainder of the TuasOne's engineering procurement and construction contract to Mitsubishi Heavy Industries Asia Pacific through a deed of novation, the filing noted.
Hyflux remains the majority shareholder with a 75 per cent stake in the TuasOne project, a company spokesman said. Mitsubishi Heavy Industries owns the remaining 25 per cent.
TuasOne was due to be completed in May this year, but funds had dried up. It is at least 96 per cent completed.
Hyflux had teamed up with Mitsubishi Heavy Industries to form a consortium that signed a waste-to-energy services agreement with the National Environment Agency (NEA) in October 2015 to build Singapore's sixth and largest waste-to-energy plant.
TuasOne will also provide waste-to-energy services to NEA over a 25-year period from 2019 to 2044. The plant is designed to add 3,600 tonnes of incineration capacity per day to Singapore's waste disposal system.
"The novation is expected to have a material effect on the financial performance of the (Hyflux) group," the filing noted.
Hyflux said in a separate filing on Thursday that the Accounting and Corporate Regulatory Authority had agreed on Tuesday (Dec 24) to give it more time to hold its annual general meeting and annual return for financial year 2018.
The new deadlines for its annual general meeting for FY2018 is March 31, 2020 and Apr 30, 2020 for its annual return for FY2018.
Home-grown Hyflux fell on hard times when it overestimated the ability of its integrated water and power plant, Tuaspring, to turn a profit.
Tuaspring, the first water plant in Asia to be integrated with power generation capabilities, cost Hyflux $1.05 billion in all. But it has been a drag on earnings since it began operations in March 2016. National water agency PUB has since taken over the desalination plant.
Hyflux's troubles centre on its expansion into the energy business through Tuaspring, where profits from the power plant were to have been used to subsidise the desalination facility's operational costs. But electricity prices plunged and, coupled with operating losses from the desalination plant, caused Hyflux to sink into debt.