Sembcorp and Keppel could be eyeing Hyflux's Tuaspring plant

Hyflux expects to get binding bids for Tuaspring by 1 October.

Bloomberg reports that Sembcorp Industries and Keppel Corporation are amongst the parties planning to study bids for Hyflux’s biggest asset and Southeast Asia’s largest desalination plant, the Tuaspring project, people with knowledge of the matter said.

The project has also drawn interest from Malaysian generator YTL Power International, the people said, asking not to be named as the process is private. Hyflux had also reached out to billionaire Anthoni Salim’s Metro Pacific Investments Corp. to gauge its interest.

Suitors would need approval from the Public Utilities Board (PUB), which regulates the Singapore water supply, before receiving more details of Tuaspring’s business operations. More information, including the price that Tuaspring receives for the water it sells to PUB, will be provided to bidders who get approval, the people said.

The project currently has a book value of $1.47b (US$1.1b) at the end of March, according to Hyflux exchange filings. Hyflux expects to get binding bids for Tuaspring by 1 October, CEO Olivia Lum said last month.

The company agreed with main creditor Malayan Banking Bhd. to execute a binding agreement with a successful bidder by 15 October, in return for the lender refraining from starting enforcement proceedings.

A representative for Hyflux said the company is unable to comment, as the Tuaspring divestment process is ongoing. Sembcorp said by email that from time to time, the company may evaluate different opportunities. There’s no assurance any such discussions will lead to a transaction, according to Sembcorp.

Keppel said in a statement that it’s always evaluating opportunities where it is able to grow its businesses.

YTL Power Managing Director Yeoh Seok Hong couldn’t immediately be reached by phone and didn’t respond to emailed queries. “We were offered to take a look, but we have no details as of now,” Metro Pacific President Joey Lim said in response to Bloomberg queries.

Read the full report here.