Hyflux refutes SMI's claims on restructuring terms

It argued that SMI knew the terms of the deal before they were published on 16 February.

Hyflux said in an announcement that SM Investments (SMI) previously agreed on the economic parameters for the settlement of restructuring obligations before they were published on 16 February, contrary to SMI’s claim in a media statement saying that it had not agreed to the allocation setup of the arrangement schemes.

In a statement, SMI claimed that it recently became aware of new material information that significantly increases the working capital requirements of Hyflux. This will affect the amount available for settlement to creditors, it said. “Had this material information been disclosed earlier, it would have been taken into consideration in the allocation previously discussed with creditor groups.”

In response, Hyflux said it was “surprised” by SMI’s new position, claiming that SMI knew that it could not review information related to Tuaspring until it executed the relevant confidentiality undertakings in favour of the Public Utilities Board (PUB). “SMI was kept closely informed and involved through the process of seeking PUB’s approval which commenced shortly after the signing of the restructuring agreement.”

SMI also had access to a virtual data room since 3 January 2019 but did not raise any issue with the economic terms throughout the months of January 2019 and February 2019, Hyflux claimed. During this time, the distribution schemes were already being discussed.

By 10 March 2019, most of the information and documents requested by SMI had been provided, with the balance that was not commercially sensitive to be provided by 31 March 2019. Hyflux also gave SMI related documents to the Magtaa project.

“As of this date, despite repeated prompting by the company, SMI has not explained how any of the information they had referred to in their letters dated 7 March 2019, 13 March 2019 and 26 March 2019 would necessitate a revision of the working capital needs of the company (much less what this revision actually is),” Hyflux said.

The utilities firm added that it is not aware if SMI has considered the recent clarification by the PUB concerning its intention to purchase the loss-making Tuaspring Desalination Plant without seeking compensation from Tuaspring—which will decrease the working capital needs of Hyflux.