Too premature to talk about another Hyflux rescue bid, court told

Ascendas Reit is the landlord of the Hyflux Innovation Centre in Bendemeer Road and the Hyflux Building in Kallang Bahru.
Ascendas Reit is the landlord of the Hyflux Innovation Centre in Bendemeer Road and the Hyflux Building in Kallang Bahru.ST PHOTO: LIM YAOHUI

Firm says it hasn't decided on asking for moratorium extension

Debt-ridden water-treatment company Hyflux told the High Court yesterday it was too premature to talk about another rescue plan, and it had not yet decided whether to ask for an extension of a debt moratorium set to expire on April 30.

A case-management conference at the High Court saw a packed room of lawyers for the embattled company's many creditors sorting out details after Hyflux aborted a $530 million rescue deal with intended white knight SM Investments last week.

Hyflux's lawyer, Mr Manoj Sandrasegara of WongPartnership, said his client had not yet decided whether the moratorium, which temporarily protects the group from its creditors, should be extended further.

Mr Manoj said: "If we do intend to apply for the moratorium to be extended, we will need about 10 days to two weeks to talk to the creditors about our next steps."

He added that national water agency PUB had not yet issued a termination notice for its water purchase agreement with Hyflux's subsidiary, Tuaspring.

PUB had given Hyflux an April 30 deadline to remedy its defaults, failing which it would take over the company's desalination plant at zero dollar.

Justice Aedit Abdullah then asked whether Hyflux was likely to have an option other than liquidation.

He cited a letter the court had received from a retail investor, Ms Violet Seow, which stated that she had "no confidence in the restructuring attempt" and the moratorium should not be extended for too long.

In response, Mr Manoj said his client would address these issues raised by the investor. Later in the session, he said he was unable to speculate on what another restructuring attempt could look like.

Justice Aedit noted that, given the now-terminated deal with SM Investments, the application for court protection to allow the restructuring to take place had now deviated from its original intention.

"I have expressed on various occasions that I have to be persuaded that there is something tangible before I can extend the moratorium. It has been taking a while and I appreciate that this is a complex restructuring," he said, urging Hyflux to reveal an alternative plan to give the court a level of certainty and concreteness to consider an extension.

"I expect that if the company wants more time, that something will be put together."

None of the other lawyers representing Hyflux's creditors present asked about the restructuring plan, though several summonses and applications made irrelevant by the scuttled deal with SM Investments were withdrawn.

However, Mr Justin Chia of law firm Eversheds Harry Elias, representing Ascendas Reit, said his clienthas not called off two applications for the landlord to re-enter properties rented by Hyflux.

Ascendas Reit is the landlord of the Hyflux Building in Kallang Bahru, and the Hyflux Innovation Centre in Bendemeer Road.

"(We) have to see what the company is going to do from now on," Mr Chia told the court, adding that the matter will be discussed in a future session.

The case conference will continue on April 25.

A version of this article appeared in the print edition of The Straits Times on April 12, 2019, with the headline 'Too premature to talk about another Hyflux rescue bid, court told'. Print Edition | Subscribe