Singapore— While Hyflux continues to meet with potential investors to discuss a rescue and restructuring plan for the beleaguered water treatment firm, the High Court allowed on May 29, Wednesday, a two-month extension for Hyflux and three subsidiaries on their debt moratorium.
The company’s new deadline is August 2.
Originally, Hyflux requested an extension of four months while it met with possible investors that include Oyster Bay Fund, a Mauritius-based multi-strategy investment fund, as well as an unnamed desalination plant company, and several others, who have signed non-disclosure agreements.
This is in addition to Middle Eastern utility company Utico, which recently met with Securities and Investors Association Singapore (SIAS) CEO David Gerald to emphasise its commitment as an ethical investor to move toward solutions that would work for all parties concerned.
The UAE-based utility firm gave Hyflux a deadline of June 17 for signing a binding agreement between the two companies.
All in all, Hyflux is in talks with seven potential companies for much-needed fund infusions.
As Hyfux made its case for extending its debt moratorium, its steps toward restructuring have included meetings with creditors every week to provide updates, as well as talks with potential investors.
“We used the time wisely,” said WongPartnership lawyer Manoj Sandrasegara, who represents Hyflux. “We have given a road map as to when and how we are going to progress … The court should take that into account.”
And, should Hyflux need more time after August 2, the High Court Justice said he was open to this, as long as the plans for restructuring moves forward.
Justice Aedit Abdullah told Hyflux to “assure the investors I will be amenable, if progress continues to be made, to a further two-month extension” even though he was “concerned about giving a four-month extension at a go.”
He added, “In relation to the payment for advisers I would stipulate a condition that a more detailed breakdown identifying how much has been paid and what remains payable to be given to… the court in two weeks.”
Justice Aedit reiterated this because the cash flow of Hyflux is precarious, and is one of the main points of concern for its creditors, especially those who have yet to be paid.
Hyflux faced a deadline on May 29 for its protection from creditors to cease.
However, Justice Aedit also issued a caveat to the water treatment company, “Aside from these conditions, I will indicate other matters which the court strongly encourages. If there is non-compliance, it will be taken into account.”
He encouraged that discussions with investors be left to Hyflux. ”I would also strongly encourage all advisers, as far as possible to leave actual discussions with investors to (Hyflux).”
Should other concerned parties decide to reach out to investors he said that they “should let the company know what they intend to do.”
The context for this is potential judicial manager Borrelli Walsh reaching out to Utico not only once but twice, even though a binding agreement between Hyflux and Utico has not yet been signed.
Hyflux, as well as DBS Bank, one of its creditors, voiced out their concerns over this.
Utico may infuse a S$400 million investment, and Oyster Bay Fund is looking to invest as much as S$500 million. The third strong possible investor, the unnamed desalination plant company, has already given a non-binding letter of intent for its assets.