Business
But the SGX filing on Friday did not reveal details about these discussions, citing confidentiality considerations and the need to protect the company’s interests in ongoing negotiations.
(Photo: Jeremy Long)
SINGAPORE: Embattled water treatment firm Hyflux said on Friday (Oct 5) that it is still in active discussions with potential investors for the divestment of its Tuaspring Integrated Water and Power Plant, as well as strategic investments for the rest of the group.
However, the SGX filing, which the company said is aimed at clarifying recent media reports, did not reveal any details about these discussions, except that Hyflux has not made any commitments and remains open to considering various opportunities.
The home-grown firm, which first made its mark in water treatment and later ventured into power generation, is currently going through a court-supervised restructuring process after first making the unexpected announcement in end-May and later obtaining an additional six-month moratorium in June.
Hyflux has cited “prolonged weakness” in the local power market for the turnabout in fortunes.
With liabilities of S$2.95 billion, the divestment of its Tuaspring plant, which cost more than S$1 billion to build and marked Hyflux’s move into the electricity market, has been seen as key to resolving the company’s cash crunch.
Hyflux has until Oct 15 to ink a binding deal with a successful bidder for Tuaspring, as part of an agreement with Maybank – Tuaspring’s only secured creditor.
With the clock ticking, a Bloomberg article on Oct 2 reported that Hyflux only received one bid for the integrated plant by the Oct 1 deadline.
Citing unnamed sources, the report said that the bid from Sembcorp Industries was below Tuaspring’s book value of S$1.4 billion and will not be enough to fully pay back loans.
The Bloomberg report added that Keppel Corp, which had earlier shown interest, did not submit a binding bid in the end.
With only one bid on the table, Hyflux may negotiate with Maybank to explore other options. There are also overseas investors who remain keen on Hyflux’s entire business, though regulatory approval could be a challenge, the article citing sources said.
Referring to this article, Hyflux said in Friday’s SGX filing that the company is still pursuing the divestment of the Tuaspring plant concurrently with strategic investments in the overall business of the Hyflux Group.
“These processes run in parallel and are at the stage where the company is actively engaged in discussions with potential investors in Tuaspring and/or the rest of the Hyflux Group,” it said.
“The company has not committed itself to any particular option or any of the proposals received at this point in time and remains open to considering various opportunities,” Hyflux wrote, while adding that any proposals received will be subjected to approval by the relevant authorities where required.
It also said that it would not be able to comment on specific details about the Tuaspring divestment process at the moment, given confidentiality considerations and the need to protect its interests in ongoing negotiations.
Trading in Hyflux’s SGX-listed shares and related securities remain suspended, leaving tens of thousands of investors reeling. In July, the company held townhall meetings that were attended by about 800 investors of its notes, perpetual securities and preference shares.
An update of the company’s reorganisation plans is expected at a court hearing scheduled on Oct 8 at 2.30pm.
