Singapore—The High Court approved the appeal from judicial managers for the liquidation of Hyflux on Wednesday (Jul 21).
The embattled water treatment firm’s winding up hearing had originally been scheduled for Jul 12, but had been halted at the last minute by Middle Eastern utility company Utico.
Utico said it was ready to put down $10 million as a deposit provided it was given 60 days to negotiate concerning restructuring Hyflux’s debts with the judicial managers.
However, Utico did not meet the minimum requirements that had been set for approval to be given for the company’s restructuring.
Unfortunately, liquidation means that the company’s 34,000 retail investors, to whom it owes $900 million, will most likely get nothing from the disposal of Hyflux’s assets.
Hyflux’s retail investors are those holding perpetual securities and preference shares (PnP).
Hyflux’s winding down has been a journey of around three years, with several would-be investors looking like they were ready to infuse the company with some much-needed cash, with Utico looking like the most promising of them.
But the Middle Eastern firm failed to fulfill the requirements in presenting a workable restructuring proposal before the hearing on Jul 21.
It seems as though Utico would succeed in its last-ditch attempt to prevent Hyflux’s liquidation earlier this month when the High Court heard of its intent to file an affidavit.
On Jul 12, High Court Justice Aedit Abdullah permitted for the draft affidavit from Utico to be circulated to creditors, and a new date for Hyflux’s winding up hearing was set.
Utico even expressed its willingness to out down a S$10 million non-refundable deposit.
On July 15, the Securities Investors Association Singapore (SIAS) wrote a letter to Utico that said SIAS would need concrete proof as well as a credible restructuring proposal from it.
SIAS requested for the Middle Eastern firm to put the $10 million deposit into either Utico’s solicitor’s account or an escrow account by 10 o’clock on the morning of Jul 21, which Utico did not do.
And since Hyflux will be running out of operating funds by the end the month and no other companies have come forward for its restructuring, liquidation seemed inevitable.
Mr David Gerald, the president and chief executive of SIAS, is quoted in The Straits Times as saying, “I am saddened by the result, but the court was very patient and accommodating. I feel really sorry for the PnP investors who may now end up getting nothing.
They put their trust in Olivia Lum and the board entirely. These are small investors and they have lost their investments. Those responsible for bringing down Hyflux will have to live with their conscience.”
The court appointed Borrelli Walsh, who has been acting as Hyflux’s judicial managers, as its liquidators.
Borelli Walsh asked Utico to pay $6,000 in legal costs after the Middle Eastern firm stepped in on July 12 with its intent to file an affidavit.
Utico has been ordered by Justice Aedit Abdullah to pay $5,000.
/TISG
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