SINGAPORE: More than a week after scrapping a key rescue deal with Indonesia’s SM Investments, Hyflux said on Monday (Apr 15) it is suing its would-be white knight.
In a statement, Hyflux said it has filed a writ of summons in the Singapore High Court “to commence an action against the investor for repudiation of the restructuring agreement”, as well as to claim a S$38.9 million deposit.
Hyflux has previously asserted its right to lay claim to this deposit, which was placed into escrow shortly after the execution of the restructuring deal, should SM Investments “wrongfully terminate” the pact.
The statement noted that SM Investments "has denied that it has repudiated the restructuring agreement” inked last October.
Hyflux said it will provide further updates as and when there are further material developments.
Knee deep in debt, the former star company sought court protection to reorganise its debts last May. By October, it found a white knight in SM Investments, which said it would invest S$530 million in exchange for a 60 per cent stake.
However, cracks in the partnership started to surface by mid-March when the Indonesian consortium said it could walk away from the deal after Hyflux's subsidiary was slapped with a default notice from PUB.
Later that month, it hit out at the Singapore company again over information disclosures and another alleged default at Hyflux's Magtaa desalination plant in Algeria.
With just weeks to go before its court-approved debt moratorium expires at the end of this month, Hyflux on Apr 4 terminated the restructuring agreement, citing that it has “no confidence” in SM Investments to complete the deal.
"Regrettably, the investor has declined to provide the company with such written confirmation that it will proceed to complete the proposed SMI Investment if the outstanding conditions are met," Hyflux had said earlier this month in terminating the deal.
"In the circumstances, the investor has repudiated the restructuring agreement," it added.
In response, SM Investments had said that it was "surprised" by Hyflux's actions. It added that it has abided the agreement at all times, and is taking legal advice on the matter.
The U-turn has left Hyflux hanging on a thread. During a case management conference last week, the company's legal advisors told the court that it plans to have discussions with all senior unsecured groups.
The company also has not decided whether to seek an extension in its debt moratorium. If it does, it will have until Apr 25 to make the necessary applications to the Singapore court.
The filing on Monday also included the announcement of nTan Corporate Advisory as an additional advisor in Hyflux's ongoing reorganisation process.