Hyflux seeks super priority debt status for $530m investment from Indonesia

The financing will be prioritised over assets like shares in HyfluxShop Holdings.

Embattled Hyflux said it made a court application to seek super priority debt status for the $530m investment it obtained from the consortium called SM Investments comprised of Medco Group and Indonesian conglomerate Salim Group.

According to an announcement, Hyflux had applied for the loan to be secured through “way of first priority fixed charges” over its other properties, in line with the Companies Act. The properties include Hyflux’s shares in HyfluxShop Holdings; its 6% cumulative non-convertible non-voting perpetual preference shares in the capital of HyfluxShop Holdings; its shares in Spring China Utility; and its shares in NewSpring Utility.

The super priority debt will also be treated as if it were part of the costs and expenses of the winding up if the company is wound up. Hyflux added that it will provide more details on its application once the court gives its directions.

As previously reported, SM Investments will subscribe for ordinary shares representing 60% of enlarged issue share capital for $400m and extend Hyflux a shareholder’s loan of a principal amount of $130m. It will also grant a loan of a principal amount of $30m to supply the company’s initial working capital requirements.

The investment and loan will be used to settle, discharge or redeem Hyflux’s unsecured financial debt, preference shares perpetual securities, contingent debt and trade debt; and finance the working capital needs of the Group's business.