UTILITIES | Staff Reporter, Singapore

SIAS slams Hyflux as path to restructuring with SMI turns foggy

Investor anxiety is rising as Hyflux is not resolving issues to keep the restructuring on track, it said.

Securities Investors Association Singapore (SIAS) has asked Hyflux to clarify the status of its restructuring deal with SM Investments (SMI) as the company “is not giving confidence to investors that it will resolve all outstanding issues to keep the restructuring deal with SMI on track,” SIAS president and CEO David Gerald wrote in an open letter.

Previously, the Public Utilities Board (PUB) argued that SMI should not use PUB’s default notice to Hyflux as the basis for the decision to withdraw from the restructuring agreement with the embattled water treatment firm. On 18 March 2019, SMI issued a notice to Hyflux, stating PUB’s default notice as an event that Tuaspring will need to cure within two weeks under the restructuring agreement between Hyflux and SMI. If not, SMI may assert rights to terminate the deal.

“Hyflux investors are seriously concerned arising from the current uncertainty caused by PUB’s notice of default, recent SMI’s notice to Hyflux and the postponement of the scheduled townhall meeting,” Gerald said. Hyflux was supposed to hold a townhall meeting on 13 March 2019.

“It is generally felt that the company is creating further uncertainty by not issuing the revised scheme document to the creditors incorporating the SIAS proposal to share in the upside from the contingent claims," the executive added.

“Can the board advise that SMI’s proposal is still on the table and that they have not given any reason to withdraw from the agreement,” Gerald said. “The recent PUB statement that they should not use its default notice as a reason to walk out is causing worry to retail investors.”

“There is no other option on the table,” he added.

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