20 July 2018
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Hyflux has till Oct 15 to find Tuaspring buyer

Straits Times
07 Jul 2018
Marissa Lee

Lender Maybank will refrain from starting enforcement proceedings against plant if criteria met

Maybank, Hyflux's largest secured lender, has agreed to give the water project developer until Oct 15 to find a buyer and ink a binding purchase agreement for the Tuaspring integrated water and power plant.

Hyflux also has to get approvals from Maybank, national water agency PUB and the Singapore High Court for the divestment by Dec 11. It must then obtain shareholders' approval for the sale by Feb 4 next year.

As long as Hyflux meets these deadlines, Maybank will refrain from commencing enforcement proceedings against Tuaspring or its assets, Hyflux said in a filing to the Singapore Exchange yesterday.

Maybank will also become more actively involved in the Tuaspring plant divestment process, and appoint valuers for the plant, Hyflux said.

The Tuaspring plant has a book value of $1.3 billion. Its holding company owes Maybank $518.4 million under a project financing loan.

Any sum left over from the asset sale can be used to settle Hyflux's other debt, including redeeming the $900 million preference shares and perpetual securities sold to retail investors in previous years, Hyflux founder Olivia Lum has said.

Tuaspring is also appointing a monitoring accountant and special accountant to monitor its cash flow and review the divestment process, respectively, with their reports to be shared with Maybank.

A Singapore court was scheduled yesterday to hear Tuaspring's application for a debt moratorium, but this was cancelled and the application withdrawn in the light of the forbearance on Maybank's part, Hyflux said.

Hyflux, in an attempt to fix a cash crunch, has been trying to divest the Tuaspring plant since February last year.

In a court affidavit written on June 14, Ms Lum said Hyflux is in discussions with four parties on a possible sale of the plant.

However, her insistence on getting no less than book value for the loss-making asset has meant that no offers have been accepted so far.

Since it filed for court protection from creditors in May, Hyflux has yet to meet its shareholders, bond holders and perp holders. Townhall meetings have been scheduled for July 19 and 20.

Unlike typical shareholder meetings, proxies will not be allowed, Hyflux said.

A 67-year old retiree, who is holding on to $25,000 in face value of perps, told The Straits Times: "I'm not optimistic about the outcome of the restructuring. If Olivia Lum is so confident that the Tuaspring plant can be sold at or above its $1.3 billion book value, why should Maybank appoint a valuer to conduct a valuation exercise of Tuaspring? I smell 'haircuts' in the air."


$1.3b

Book value of Tuaspring plant.

$518.4m

Amount owed by Tuaspring's holding company to Maybank under a project financing loan.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.