SINGAPORE: The Singapore High Court on Tuesday (May 7) denied a group of seven unsecured banks the go-ahead to be carved out of the debt moratorium to file an application to have Hyflux and Hydrochem placed under judicial management.
The court cited that Hyflux made a credible case by saying that granting the carve-out would have an adverse impact on the company’s restructuring efforts and ongoing projects.
The group – comprising Mizuho Bank, KfW IPEX-Bank, Bangkok Bank, BNP Paribas, CTBC Bank, The Korea Development Bank and the Korea Development Bank, Singapore Branch – is collectively owed a total of S$648.7 million.
However, Justice Aedit Abdullah said the unsecured banks are given the liberty to file the application again, based on the progress of Hyflux’s restructuring process and the fact that “things can change”.
He added that he would “leave the sword hanging above Hyflux’s head” and keep the company on a tight leash.
The High Court also granted the company a five-day extension on its debt moratorium, originally set for May 24.
Hyflux will be able to apply for a further extension to the court-sanctioned protection from creditors when it appears before the court on May 29.
In the meantime, Hyflux will have to file an affidavit by May 24 to provide an update on the restructuring process.
The company also has to submit a response to allegations made by an unsecured working group of its financial creditors and a proposal on what kind of conditions it must fulfill should it wish to apply for a further extension of the moratorium on May 29.
READ: Singapore regulators reviewing disclosure issues, accounting practices at Hyflux for potential breaches
This comes as Hyflux races to secure the S$400 million lifeline from United Arab Emirates utility company Utico FZC for equity and working capital purposes, as well as possible urgent interim funding.
Hyflux said last week in a filing to the Singapore Exchange that its legal and financial advisers are “currently engaged in active discussions” with Utico to work out a binding term sheet for the potential investment.
Meanwhile, it remains in “concurrent discussions with several other parties” that are interested in investing its business, the company added.
This is the latest development in the Hyflux saga, after the restructuring agreement between the Singapore firm and its would-be white knight SM Investments was scrapped last month.