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UTILITIES | Staff Reporter, Singapore
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Hyflux thrown short lifeline as Court denies bank efforts to place it under judicial management

Its debt moratorium was extended to 29 May.

Embattled water firm Hyflux enjoys a short reprieve after the Court declined efforts by seven unsecured banks to put the firm and its subsidiary under judicial management as part of the Companies Act, a filing with the Singapore Exchange (SGX) revealed.

As a result, the Court has extended the moratorium for Hyflux and its three subsidiaries to 29 May. A court hearing for a further extension of the moratorium has been scheduled for the same day at 2:30 p.m.

The group of banks, comprising Mizuho Bank, KfW IPEX-Bank GmbH, Bangkok Bank Public Company, BNP Paribas, CTBC Bank Co., the Korea Development Bank and Korea Development Bank, Singapore Branch, filed the leave applications on 25 April.

On 22 April, Maybank ended its collaboration agreement with Tuaspring and Hyflux as Hyflux failed to execute a binding agreement with a successful bidder/investor by the extended deadline. The deadline, which was initially set for 15 October 2018, was later extended to 8 November, 4 December, 31 December, 4 February and 28 February.

“This constitutes a breach which is incapable of remedy under the collaboration agreement, entitling Maybank to terminate the collaboration agreement,” Hyflux said.

Hyflux previously disclosed that senior lenders’ recovery is likely to be limited, and subordinated lenders may not even recover a cent as the firm attempts to dispose its loss-making Tuaspring desalination plant.

Also read: Hyflux seeks 3-month extension of protection from creditors

The banks’ leave applications were filed after a restructuring agreement between Hyflux and SM Investments (SMI) fell through in early April. In another blow, the Public Utilities Board (PUB) issued a notice to Tuaspring that will terminate the Water Purchase Agreement (WPA) and take over the desalination plant, after it had failed to meet its contractual obligations. PUB gave Tuaspring until 30 April to remedy defaults related to the WPA entered into between the water agency and the desalination plant in 2011.

In a race against lenders and investors demanding payment, Hyflux has revealed that it is in talks with potential white knight Utico, a Middle Eastern private full service utility and developer, which expressed intent over a possible $400m injection.

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