A crucial April 1 deadline that Hyflux's white knight set for its $530 million rescue offer came and went without a whimper, leaving investors and creditors more uncertain than ever.
The Salim-Medco consortium SM Investments (SMI) had threatened to assert its right to yank the restructuring offer by that date if certain conditions were not met.
But the date passed with neither SMI nor Hyflux having anything to say when asked by The Straits Times yesterday.
This has left investors and observers still guessing just days before Friday's make-or-break-vote that will decide Hyflux's fate.
Indonesian conglomerate Salim Group and energy giant Medco Group had agreed on Oct 18 to throw Hyflux a $530 million lifeline in exchange for a 60 per cent stake in the restructured company once all its debts are settled.
But SMI got cold feet after water agency PUB served a default notice on March 5 to Hyflux subsidiary Tuaspring Pte Ltd (TPL).
This concerned the unit's failure to keep the plant reliably operational and for not producing financial proof that it can be kept running for the next six months.
Hyflux disclosed on March 18 that SMI had asserted its right to back out of the deal by April 1 if Tuaspring's defaults were not fixed.
If SMI walks out before Friday's vote on the restructuring plan, then the rescue plan is as good as dead, say analysts.
A source close to the deal said: "As long as SMI has not formally withdrawn, then we assume they are still in the game. And investors should vote on April 5."
But the rescue plan has been looking shaky since last Thursday, when SMI said it may have grounds to walk away because Hyflux withheld key information on the group's financial state, resulting in SMI underestimating how much it would take to rescue the firm.
This "new material information" that came to light significantly increases Hyflux's working capital requirements, which in turn could "affect the amount available for settlement to creditors", SMI said.
It added it has not agreed to the current allocation.
But Hyflux maintains that SMI had agreed to the allocation of the $271 million to settle debts with creditors before publication of the restructuring scheme on Feb 16.
SMI also claimed that PUB's default notice constitutes a "prescribed occurrence" that allows it to terminate the deal.
But Hyflux argued that such an event has not yet taken place, and the earliest that PUB could terminate the water contract if Tuaspring's defaults are not remedied is now May 1. This is because the PUB has agreed to give TPL until April 30 to fix the defaults.
The source close to the deal said: "Hyflux has said that SMI can't give any deadline because there is no default of its restructuring agreement, although SMI has tried to claim that there are defaults.
"SMI can escape if people vote against the scheme on April 5."
Despite the uncertainty, the Securities Investors Association, Singapore, is trying to swing more investors to the "yes" vote because they will likely get nothing in a liquidation scenario.
A preference share investor who wanted to be known as Mr Sim said he is voting "yes" because he stands to recover "something" from his initial investment of a few hundred thousand dollars.
"I am voting based on... what Hyflux presented to us... not on what SMI is not happy about," he said.
The 70-year-old retiree also cited the Government's "clear signal that it is not coming to help us".
"We have to stand up for ourselves. It is better to get something than nothing," he said.