A new plan is on the table for debt-stricken Hyflux that could see it avoid liquidation and keep the 34,000 retail investors "whole in its books", an investor watchdog said yesterday.
The Securities Investors Association Singapore (Sias) said this information came from a meeting with representatives of the water treatment firm, including group chief executive Olivia Lum, yesterday.
Sias president David Gerald said he was briefed by Hyflux advisers that the company is working out a "credible plan where the senior unsecured perps and pref holders will be much better off than in a liquidation".
He said the request by Sias to avoid a "haircut" for retail investors would be accommodated in this plan, which suggested the markdowns for perpetual securities and preference share values may not be as drastic as they were in the abandoned agreement with erstwhile white knight SM Investments.
But the new proposal will first need to be submitted to court, he added. The next court date for the supervised restructuring process of Hyflux is on Thursday.
The watchdog had asked to discuss Hyflux's game plan after the $530 million rescue deal with SM Investments went awry earlier this month. In addition, national water agency PUB said last week it will take over Hyflux's Tuaspring desalination plant on May 17.
Mr Gerald said Hyflux's advisers told Sias the new plan would take at least three months to materialise.
He added: "Sias calls on all parties, senior and junior creditors, to give the company time to work on the alternative plan to avoid liquidation, which will result in a very adverse return to all the creditors and stakeholders."
In addition to Ms Lum, the meeting at the Sias office was attended by Hyflux directors Teo Kiang Kok, Gay Chee Cheong, Christopher Murugasu and Lau Wing Tat, as well as veteran restructuring expert Nicky Tan from nTan Corporate Advisory and the company's solicitor, Mr Manoj Sandrasegara, from WongPartnership.
Mr Gerald did not elaborate on the new plan proposed by Hyflux.
Investors were cautiously optimistic that it could mean the appearance of a new white knight or a chance of a fixed redemption date of their holdings, but "ultimately, the devil is in the details", said one preference shareholder.
The clock continues to tick for Hyflux, with the fast-approaching April 30 deadline of its debt moratorium protecting the company from its creditors.
For the company to have at least three months to work out the details, Hyflux would most likely need to call for an extension to the deadline.
Hyflux did not respond by press time.