Sembcorp, Keppel, YTL said to eye bidding for Hyflux's $1.47b Tuaspring plant

The sale of the Tuaspring plant is key to helping cash-strapped Hyflux get back on its feet.
The sale of the Tuaspring plant is key to helping cash-strapped Hyflux get back on its feet.PHOTO: HYFLUX

SINGAPORE (BLOOMBERG) - Sembcorp Industries and Keppel Corp are among parties planning to study bids for Hyflux's biggest asset in a sale that is key to helping the cash-strapped company get back on its feet, according to sources.

Hyflux's Tuaspring project, which includes South-east Asia's biggest desalination plant, has also drawn interest from Malaysian generator YTL Power International, the sources said, asking not to be named as the process is private. The asset had a book value of $1.47 billion at the end of March, according to Hyflux exchange filings.

Hyflux had also reached out to billionaire Anthoni Salim's Metro Pacific Investments Corp to gauge its interest, the people said.

Suitors would need approval from PUB, which regulates the Singapore water supply, before receiving more details of Tuaspring's business operations, according to the sources. More information, including the price Tuaspring receives for the water it sells to PUB, will be provided to bidders who get approval, the sources said.

Hyflux, saddled with $2.95 billion of liabilities, started a court-supervised reorganisation process in May and obtained a six-month debt moratorium. The water treatment firm is led by founder Olivia Lum, who was a poster child for Singapore entrepreneurs before Hyflux's finances were strained by an ill-timed entry into the energy business.

The Tuaspring project combines a desalination plant and a gas turbine power plant. It has a designed capacity of 318,500 cubic m per day of desalinated water and 411MW of power, according to its website.

Any deal would add to the US$59.6 billion of acquisitions announced in South-east Asia this year, data compiled by Bloomberg showed.

Hyflux expects to get binding bids for Tuaspring by Oct 1, Lum said last month. The company agreed with main creditor Malayan Banking to execute a binding agreement with a successful bidder by Oct 15, in return for the lender refraining from starting enforcement proceedings.

Lum said last month there are eight interested parties for Tuaspring. Bids for the project should not be "so unreasonably low" that the firm cannot pay back its stakeholders, she said at the time.

 

A representative for Hyflux said the company is unable to comment, as the Tuaspring divestment process is ongoing.

Sembcorp said by e-mail that from time to time, the company may evaluate different opportunities. There is no assurance any such discussions will lead to a transaction, according to Sembcorp. Keppel said in a statement that it is always evaluating opportunities where it is able to grow its businesses.

YTL Power managing director Yeoh Seok Hong could not immediately be reached by phone and did not respond to e-mailed queries.

Metro Pacific president Joey Lim said in response to Bloomberg queries: "We were offered to take a look, but we have no details as of now."