Skip to main content




Hyflux to sell 30% stake in SingSpring desalination plant to Keppel Infrastructure Trust for S$12 million

Hyflux to sell 30% stake in SingSpring desalination plant to Keppel Infrastructure Trust for S$12 million

Keppel Infrastructure Trust currently owns 70 per cent of the SingSpring desalination plant. The facility, located in Tuas, was Singapore's first desalination plant when it began operations in 2005. (Photo: Keppel Infrastructure Trust)

SINGAPORE: Beleaguered water treatment firm Hyflux has entered into a conditional sale and purchase agreement with the trustee-manager of Keppel Infrastructure Trust to sell its stake in the SingSpring desalination plant for S$12 million.

This was announced by Hyflux’s judicial managers from Borrelli Walsh and Keppel Infrastructure Fund Management (KIFM) after the market close on Wednesday (Jul 7) in separate filings to the Singapore Exchange.

Keppel Infrastructure Trust owns the remaining 70 per cent stake in SingSpring, which was built by Hyflux and began operations in 2005 as Singapore’s first desalination plant.

Under the agreement, NewSpring O&M – a subsidiary of Keppel Infrastructure, the sponsor of Keppel Infrastructure Trust – will take over the operations and maintenance services to SingSpring upon completion of the transaction.

The plant’s current operations and maintenance team from Hyflux Engineering has been offered to continue their roles and duties with NewSpring O&M on terms to be agreed, the filings said.

READ: Hyflux’s judicial managers file for liquidation as restructuring ‘not possible’ after failed investor talks

The sale is subject to approvals from national water agency PUB and the lenders under a term loan facility taken up by the trustee of SingSpring Trust.

KIFM’s CEO-designate Jopy Chiang said: “The strategic acquisition of the remaining 30 per cent stake in SingSpring Desalination Plant will enhance the operational and business continuity of the asset, and also strengthen the cash flow stability of the asset.”

He added that this was an opportunity to increase its stake in “a stable asset at a level which is expected to be accretive to distribution per unit and offer an attractive risk-adjusted return” for the trust.

Borrelli Walsh, which has been in charge of Hyflux since November last year, said it will “provide further updates as and when there are material developments”.

The announcement on SingSpring comes days ahead of a scheduled hearing on Jul 12 for the judicial manager’s court application to wind up Hyflux.

READ: From making waves to drowning in red ink: Hyflux, Tuaspring and how a business giant came undone

Borrelli Walsh had said on Jun 4 that the restructuring of Hyflux is no longer possible following unsuccessful talks with an investor and that the company’s remaining value is “best realised in a liquidation”.

It also said there were six bids involving individual assets of the company.

In a subsequent update on Jun 24, the judicial manager said it could not give an estimated timeline for completing the liquidation given that Hyflux consists of more than 80 entities across multiple jurisdictions.

Neither could it provide estimated recoveries on investments made, as there remains “significant” work to be done and issues to be resolved in respect to asset sales, according to the update.

Borrelli Walsh also noted that it has gathered necessary information “to conduct thorough investigations into the assets, business affairs and dealings” of Hyflux. Areas which may warrant investigation have also been identified.

Last year, Singapore authorities launched a joint investigation into Hyflux and its current and former directors for suspected false statements and disclosure requirement breaches, as well as potential non-compliance with accounting standards.

Source: CNA/sk(ta)


Also worth reading