Hyflux gets one-month lifeline extension

It had asked the court to let it prolong its search for a rescue investor.

Hyflux has been granted an extension of its debt moratorium to 24 May, according to an announcement filed on the Singapore Exchange (SGX).

The embattled water treatment firm applied for the moratorium extension on 23 April. Two days later, Hyflux said it is engaged with potential investors and an application by a group of seven unsecured banks to vary the moratoriums, known as the banks’ carve-out application.

If a carve-out is approved, the banks reportedly plan to file an application to appoint judicial managers over Hyflux and Hydrochem to replace the present Hyflux management.

The hearing of the banks’ carve-out application has been adjourned to 7 May. “If the Court does grant such leave, it will convene a subsequent hearing, which is expected to be on 13 May, to decide on the said applications,” Hyflux said.

Hyflux is said to be in talks with an unnamed potential white knight from the Middle East which expressed intent over a possible $400m injection into the firm after its previous deal with SM Investments (SMI) fell through. The possible injection will be used for equity and working capital purposes, as well as possible urgent interim funding.

Additionally, the firm revealed that Tuaspring received a letter from Maybank wherein the bank declared to be immediately paid back its term loan facilities and the cash cover for contingent liabilities sums amounting to $509.12m and US$44.53m, respectively, on top of further interest and legal costs on a full indemnity basis. Maybank demanded that Tuaspring make payment of these sums by 30 April.

Also read: Maybank kills collaboration agreement with Tuaspring and Hyflux

“The term loan and letter of credit facilities made available by Maybank under the Tuaspring financing arrangements are non-recourse to and are not guaranteed by the company. Maybank has also given notice to Tuaspring that the floating charge created over all of Tuaspring’s property charged pursuant to a debenture has crystallised,” Hyflux noted.

Tuaspring is not to sell, remove, transfer, or otherwise dispose of the debenture, save for the sale of the desalination plant and shared infrastructure to PUB pursuant to the terms of the water purchase agreement (WPA).

Maybank has reserved its rights under hedging agreements entered into as part of Tuaspring’s financing arrangements.

As currency exchange fluctuations and interest rate movements directly impact the exposure under these hedging agreements, Hyflux is unable to precisely determine the exact amount payable to Maybank, the firm said, adding that the aggregate amount under the said hedging agreements is estimated to be in the region of $28.03m as at end-March 2019.