SIAS calls on Hyflux to clarify if rescue deal from Indonesian investors ‘is still on the table’

SIAS calls on Hyflux to clarify if rescue deal from Indonesian investors ‘is still on the table’

Hyflux Singapore
(Photo: Jeremy Long)

SINGAPORE: Recent developments, such as being slapped with a default notice from national water agency PUB, have thrown up uncertainties about the future of Hyflux, and with the clock ticking down to Apr 5 when its restructuring plan will be put to vote, concerns among retail investors have risen.

With that, the Securities Investors Association Singapore (SIAS) on Monday (Mar 25) urged Hyflux to provide updates on whether the rescue deal involving Indonesian consortium SM Investments (SMI) is still on the table.

The letter, signed off by SIAS president David Gerald, said investors of the beleaguered water treatment firm have become “seriously concerned” following events starting with the default notice earlier this month.

The Mar 5 notice had said that if the defaults were not resolved by Apr 5, PUB will exercise its right to terminate its water purchase agreement with Hyflux and take control of the Tuaspring desalination plant.

READ: PUB’s default notice to Tuaspring complicates Hyflux’s restructuring: SIAS, analyst

That was followed by a notice from the Salim-Medco consortium stating that it will terminate the deal if Hyflux does not remedy the defaults in two weeks.

Last week, PUB said that its actions should “not be used as the basis for SMI’s decision to withdraw” from its agreement with Hyflux. Since then, both Hyflux and its Indonesian investors have not provided any updates.

“The recent PUB statement that they should not use its default notice as a reason to walk out is causing worry to retail investors. There is no other option on the table,” wrote Mr Gerald.

“Can the board advise that SMI’s proposal is still on the table and that they have not given any reason to withdraw from the agreement?”

READ: PUB ready to take over desalination plant at zero dollars if Hyflux's Tuaspring does not resolve defaults

Meanwhile, Hyflux has not issued a revised scheme document to reflect the amendments that it has proposed earlier this month to give retail investors of its perpetual securities and preference shares greater cash recovery, said Mr Gerald from SIAS.

The company’s sudden postponement of the third town hall meeting, originally scheduled for Mar 13, with no updates of a new date, is “another reason for anxiety amongst investors”.

“The company is not giving confidence to investors that it will resolve all outstanding issues to keep the restructuring deal with SMI on track,” he said in the open letter.

“Could the board address all the above concerns immediately, please?”

Channel NewsAsia has reached out to Hyflux for comment.

Source: CNA/sk(hm)