Embattled Hyflux struggles with restructuring plan

The only concrete news is the 16% staff reduction.

After being granted the six-month moratorium from legal proceedings with creditors, Hyflux has yet to reach a final decision for its voluntary restructuring. “No decisions have been made at this stage of the process. We will share more information when there is more clarity on the plan,” it said in response to a media query by Singapore Business Review.

“We have to involve many different groups to come up with a plan that everyone can agree to,” Hyflux said. The group involves close to 30 banks, hundreds of noteholders and thousands of perpetual securities holders and preference shareholders.

“We are currently assessing the position of all securities holders within the context of our reorganisation process, and working hard to preserve value for all stakeholders including the securities holders,” it added.

According to other media reports, investors have reportedly questioned the company on whether it makes enough sacrifices to cut costs.

The company has been working with a team that is 16% smaller, Hyflux said. “All management attrition has not been backfilled, and existing managers have taken on additional workload without additional pay,” it added.

When asked whether management is making sacrifices to cut costs, it responded that as the weakness in the Singapore power market has been impacting the group since 2016, the company had started implementing management pay freezes and no bonuses since 2016.

Meanwhile, as said in an announcement dated 6 July 2018, Hyflux, Tuaspring, and Maybank have reached agreement in the divestment of Tuaspring Integrated Water and Power Project (IWPP). Hyflux did not say if there are any bidders for the project yet.

Maybank is Tuaspring’s only secured creditor and has provided Tuaspring with banking facilities which are secured by various collaterals and securities over the latter’s assets, including the IWPP. “The company will continue to seek potential investors with a view to divesting its interest in Tuaspring’s Integrated Water and Power Project,” Hyflux said.

It has to execute a binding agreement with a successful bidder or investor by 15 October 2018, obtain approval for the transaction from Maybank, the Public Utilities Board and/or the Singapore High Court (if necessary) by 11 December 2018, and obtain the approval of the shareholders by 4 February 2019.