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Embattled Hyflux gets another extension for debt moratorium until Apr 30

Embattled Hyflux gets another extension for debt moratorium until Apr 30

The headquarters of Singapore water treatment firm Hyflux on Bendemeer Road. (Photo: Jeremy Long)

SINGAPORE: The Singapore High Court on Thursday (Feb 20) granted embattled water treatment firm Hyflux another two-month extension for its debt moratorium.

The court-sanctioned moratorium, which currently grants it a reprieve from creditors until Feb 28, will now end on Apr 30. This was the same amount of time that Hyflux had sought.

The court also adjourned the company’s leave application to convene its scheme meetings to Mar 10.

Hyflux is in the final legs of concluding a S$400 million restructuring deal with United Arab Emirates utility firm Utico. The rescue plan, signed last November, will need to get the okay from a majority of the creditors and another court approval by May 26 before it expires.

READ: ‘Uneven’ Hyflux-Utico deal to see huge losses for some retail investors, say experts

READ: New suitor Longview International and joint venture partner express interest in embattled Hyflux

Represented by its new legal advisers from Clifford Chance and Cavenagh Law on Thursday, Hyflux laid out a tentative timeline which included the holding of scheme meetings for creditors on Apr 17 and the dispatch of a circular to shareholders by Apr 23.

It also intends to seek the court’s green light by Apr 28 to go ahead with the rescue plan.

No parties were opposed to the extension of the moratorium on Thursday. This marks the company’s ninth extension of its debt moratorium since applying for court protection in May 2018 to reorganise its business and liabilities.

Since taking over from WongPartnership at the end of last month, Hyflux’s new legal advisers have been working on several outstanding issues between the various parties, such as financial and know-your-customer (KYC) due diligence, security documentation, proposed changes to the scheme and professional adviser fees.

Mr Nish Shetty, partner at Clifford Chance Asia, said there has been “movement of updates in the right direction” for most of the issues, except for the drafting of an explanatory statement of the restructuring scheme which will require more time.

On the simmering issue of professional adviser fees, Mr Shetty told the court that it is seeking clarification from Utico after the Emirati utility firm indicated through a letter that it is willing to raise the pot for adviser fees to S$50 million, instead of the previously agreed S$40 million.

S$50 million will allow these adviser fees to be “paid pretty much in full”, while S$40 million will cover about 75 per cent of the estimated fees which is “not a bad position to be in” for creditors, he added.

READ: Hyflux independent director resigns due to ‘unresolved differences’ over legal team change

Apart from Utico, Hyflux has also been approached by two new suitors over the last few months.

The first is a little-known investor called Aqua Munda which came up with an offer in December to purchase about S$1.8 billion worth of Hyflux’s debts.

The second is a Singapore-based company called Longview International Holdings which on Wednesday expressed interest in investing in Hyflux together with a joint venture partner from China.

Asked by Judge Aedit Abdullah if the new potential investor could cause any changes to plans, Mr Shetty said Longview International only submitted a letter of interest and it remains “early days” to tell if it has a proposal that merits consideration.

Source: CNA/ad

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