SIAS calls new Hyflux plan to avoid liquidation “credible” and a “win” for its 34,000 shareholders

The new plan will take a minimum of three months to take shape, and has Hyflux applying for an extension on its debt moratorium this week

Photo: YT screengrab

Singapore—In the latest development in the saga of beleaguered water treatment firm Hyflux, the Securities Investors Association Singapore (SIAS) said on Monday, April 22, that the new revival plan in the works is “credible” and will be a “win” for the company’s 34,000 retail investors.

The new plan will take a minimum of three months to take shape, and has Hyflux applying for an extension on its debt moratorium this week, SIAS said.

On Monday, April 22, David Gerald, the president of SIAS, met with Hyflux’s founder and CEO Olivia Lum, along with Nicky Tan of nTan Corporate Advisory, Hyflux directors Teo Kiang Kok, Gay Chee Cheong, Christopher Murugasu and Lau Wing Tat, and Manoj Sandrasegar from WongPartnership, the company’s legal representatives.

Mr Tan nTan Corporate Advisory, who is well-known for corporate restructuring, was brought on board last week to help resolve the company’s issues.

Monday’s meeting had been facilitated by SIAS in order to determine whether the water treatment firm had an alternative plan as a back-up since an earlier deal with would-be white knight Indonesian consortium SM Investments fell through.

The president of SIAS said that the meeting was a “fruitful” one. However, Channel NewsAsia (CNA) says that Mr Gerald withheld from disclosing details of the new plan since it needs to be handed into court at Hyflux’s case management conference, which is scheduled for this Thursday, April 25.

Mr Gerald told CNA,

“They have revealed that they have been actively working on another new plan. They can’t reveal the full details but having discussed with them behind closed doors, I’m quite optimistic.

There is no mention of a white knight but there are many ways to skin a cat … It doesn’t have to be the way it happened the last time.”

He also said that the advisors have planned a new way to restructure Hyfkux in order to make sure that the senior unsecured creditors, as well as the retail investors, would be “much better off than in a liquidation”.

He said, “For the perpetual securities and preference shareholders, they get nothing if there’s no plan. They wanted something reasonable so the company will now keep (them) whole on the book and they will not be asked to take a haircut.”

The president of SIAS asked all parties to stay patient in order to give the company time to develop this plan and to avoid the possibility of liquidation.

“Given the hard work that’s been put in and the injection of new advisors, I think we can hope for the best.

According to the advisers, for the new plan to materialise, the company will need at least three months, which SIAS supports in the interest of all retail investors.

SIAS calls on all parties, senior and junior creditors to give the company the time to work on the alternative plan to avoid liquidation, which will result in a very adverse return to all the creditors and stakeholders.”

Hyflux’s debt moratorium will end by the end of the month. Therefore, the company needs to file applications to the court this Thursday.

The Public Utilities Board (PUB) announced on April 17 that it would take over the company’s desalination plant in Tuaspring within 30 days.

But this is not the only battlefront Hyflux is facing. The firm recently filed a lawsuit against SM Investments, which in turn also said it would sue the company. The two are now battling over the S$38.9 million deposit that had been put in escrow after the restructuring agreement had been signed last year.

Now that there is a new plan in the offing, the president of SIAS asked both parties to settle the legal cases peaceably, for the sake of the real investors who have sunk their personal funds into Hyflux, saying, “I call on both SM Investments and Hyflux to come to a quick settlement.”/TISG

Read related: Hyflux’s Tuaspring Plant to be turned over to PUB on May 17, Water Purchase Agreement terminated

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