Water treatment company Hyflux yesterday applied to the Singapore court to begin a reorganisation of its business.
This will provide it with breathing space to focus on ongoing discussions with strategic investors, while seeking to improve operations and maintain cash flows after lower electricity prices hurt its finances.
The firm, founded by Malaysia-born Olivia Lum, has suspended the trading of its shares and related securities.
Ernst & Young Solutions has been appointed as financial adviser and WongPartnership as legal adviser.
Hyflux has been advised at this time not to make distribution payment due on May 28 on its perpetual capital securities.
In a letter to shareholders, Ms Lum said the reorganisation will enable Hyflux to emerge stronger and be poised for sustainable growth. "On the ground, it will continue to be business as usual," she said.
Last year, Hyflux posted its first loss since listing, reporting a net loss of $116.4 million, owing to continued weak electricity prices across the Singapore power market.
It has not been any better this year, as the burden of the loss-making Tuaspring desalination and power plant cost Hyflux dearly. Its net loss for the three months to March 31 widened to $22.21 million from $64,000.
Hyflux has held talks to sell a stake in Tuaspring without much success.