Hyflux says restructuring under threat, cites PUB default notice

Hyflux and Tuaspring have until 1 April to resolve all defaults or PUB will take control of the plant.

Hyflux said the Public Utilities Board’s (PUB) default notice for Tuaspring can threaten its debt restructuring agreement, according to an announcement. Hyflux and Tuaspring said they are seeking legal advice and are in communication with PUB and SM Investments.

Hyflux’s restructuring agreement entitles its investor, SM Investments, to terminate the deal upon a “prescribed occurrence” having occurred and, if such prescribed occurrence is capable of being remedied, is not remedied within two weeks (or such other period as mutually agreed).

Also read: Hyflux woes see no end as PUB warns takeover of Tuaspring plant

Moreover, it was mentioned that a termination of the water purchase agreement (WPA) between PUB and Tuaspring may entitle the SM Investments to assert a right to terminate the restructuring agreement.

“With the issuance of the default notice, PUB requires [Tuaspring] to fully resolve all defaults within the default notice period, failing which, upon the expiry of the default notice period, PUB will exercise its right to terminate the WPA and take control of the plant,” PUB said in a notice on 5 March.

“If SM Investments proceeds on the basis that a prescribed occurrence has arisen, and is not remedied by the end of the two-week period (1 April 2019), it may assert a right to terminate the restructuring agreement,” Hyflux said. It is also entitled, at all times, to release, waive or compromise any obligation or term under the deal.