The utility said it has no confidence that SMI is prepared to complete the investment even if the restructuring gets completed.
Hyflux said SM Investments (SMI) has terminated its investment for the restructuring deal of the embattled utilities firm, an announcement revealed. It added that it has no confidence that SMI is prepared to complete the investment even if precedent conditions for the restructuring are fulfilled.
As a result, scheme meetings on 5 April 2019 and 8 April 2019 are cancelled. Scheme parties, including bank lenders, trade creditors, medium-term note holders, perpetual capital securities holders, and preference shareholders, are also not required to attend the extraordinary general meeting on 15 April 2019.
“The company has attempted on multiple occasions to meaningfully engage with the investor on its assertions on the restructuring agreement,” Hyflux said, adding that it sought a final clear and unequivocal written from SMI that it will proceed to complete the investment if all the outstanding conditions are met.
“Regrettably, the investor has declined to provide the company with such written confirmation that it will proceed to complete the Proposed SMI Investment if the outstanding conditions are met,” Hyflux said.
Meanwhile, Hyflux said it will pursue other opportunities for the reorganisation as well as work with key creditor groups to find mutually acceptable bases to enable the company to pursue such alternative opportunities.
The clarification from the Public Utilities Board (PUB) on its intention to acquire the loss-making Tuaspring Desalination Plant without seeking compensation from Tuaspring, Hyflux argued, could potentially enable it to reach out to a wider pool of investors which may not otherwise have been interested in an investment in the group. “The company will continue liaising with the PUB on this aspect,” it added.
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