Debt-ridden water treatment company Hyflux has filed a lawsuit against its former suitor, SM Investments (SMI), in the Singapore High Court for the repudiation of the rescue deal, and is claiming the $38.9 million deposit.
Hyflux has fired the first salvo in its dispute with SMI, which the water treatment company said has denied repudiating the restructuring agreement struck in October last year. SMI was supposed to be the white knight for Hyflux.
The company, in a regulatory filing yesterday, said it had filed a writ of summons in the Singapore High Court to begin an action against SMI for repudiation of the agreement and to claim the $38.9 million deposit placed into escrow shortly after the execution of the restructuring agreement.
Hyflux will provide updates as and when there are any further material developments concerning this matter. SMI had earlier this month commented that it was "surprised" by Hyflux's "purported termination" of the rescue deal, and will be taking legal advice in relation to Hyflux's action.
Hyflux has also announced the appointment of nTan Corporate Advisory as an additional adviser in the company's ongoing court-supervised reorganisation process.
The water treatment company has liabilities in excess of $2.6 billion and had earlier agreed to sell a majority stake in the restructured company to SMI in exchange for a $530 million investment.
But that plan fell apart earlier this month. Hyflux said it pulled out because of SMI's "repeated refusal to commit to making the investment necessary for the restructuring".
Last Thursday, Hyflux told the High Court 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.
Unsecured investors stand to lose everything if the water treatment company fails in its debt restructuring attempt and is liquidated.