Like a cat with nine lives, Hyflux has managed to fend off a bid by seven banks to start the legal process to have the troubled water treatment firm placed under judicial management.
The High Court also extended the deadline for Hyflux's debt moratorium yesterday with its creditors from May 24 to May 29.
Justice Aedit Abdullah said he "won't make any order" on whether the seven banks - which are collectively owed $648.7 million in debt - are allowed to start an action to put Hyflux and one of its key units, Hydrochem Singapore, under judicial management.
But Hyflux was left under no illusion it is on borrowed time. Justice Aedit told its lawyer Smitha Menon of WongPartnership that the banks are "given the liberty to apply to revive its application (for judicial management) should circumstances change".
"I will leave this sword hanging over (Hyflux's) head," he said. "I will be keeping the company on a tight leash, given that we have been at this for quite a period of time."
Hyflux is racing to nail down a $400 million rescue deal with Utico, the largest utilities provider in the United Arab Emirates.
Last month, it aborted a $530 million deal with Indonesian consortium SM Investments and is now fighting to claim a $38.9 million deposit.
Had the banks prevailed yesterday, they could have asked the court on May 13 to place Hyflux and Hydrochem Singapore - its engineering, procurement and construction business - under judicial management. That court date has now been cancelled.
Lawyers for creditor DBS and a syndicate of TuasOne lenders opposed the banks' application. Mr Edward Tiong of Allen & Gledhill, who represented DBS, said it will "destroy or erode the value of whatever benefit the TuasOne project may have".
TuasOne, a waste-to-energy plant, was to have been finished this month but has been delayed to early 2020 due to lack of funding.
"TuasOne is one of Hyflux's most valuable remaining assets... Everyone has seen what happened to Tuaspring. If a judicial management application is filed, there is real risk that all the restructuring efforts will be undermined," Mr Tiong said.
Hyflux called judicial management an expensive prelude to a long-drawn-out liquidation, one that would destroy value that could otherwise be extracted for creditors under a restructuring scenario.
While many of its commercial agreements are in default, the counter-parties have not exercised their rights to terminate them. If Hyflux is put into judicial management, the likelihood of liquidation may prompt these counter-parties to terminate the agreements.
Mr Eddee Ng, senior partner at Tan Kok Quan Partnership, who represents the group of banks, said this is "nothing more than a scare tactic".
He added: "We had close to 11 months of moratorium and there's very little to show for it beyond the letter of intent (from Utico)."
But Ms Menon argued: "It has been 11 months but the parties have elected to not terminate their commercial agreements because they are comfortable working out solutions with (Hyflux) management.
"Completing TuasOne is a crucial part of Hyflux's portfolio... If you bring in a judicial manager now, the message will be there's no faith that we can successfully restructure. And it will influence the kind of offers we have. We will be in a worst bargaining position."
Hyflux will make its case for extending the debt moratorium on May 29 but Justice Aedit was clear that it will not get an easy ride.
"A moratorium is meant to be a temporary institution to allow a company to put something together... but it doesn't mean I can give a blank cheque for the moratorium going forward," he said. "The moratorium is not likely to be as long as it used to be and I may attach conditions."
These include "disclosure of running costs of the company including all of its restructuring efforts, and a timeline given to me of the expected completion of restructuring effort... leading up to a possible scheme application and some assurance of continuing engagement with various creditors".