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Hyflux expects 'material adverse financial impact' from ending previous deal for TuasOne project
HYFLUX is expecting the axing of a previous settlement agreement with Mitsubishi Heavy Industries (MHI) to result in an "overall material adverse financial impact to its financial performance", the embattled water treatment firm announced on Monday.
Last week, BT reported that Hyflux has signed a new agreement in relation to its TuasOne waste-to-energy project, which novated the engineering, procurement and construction (EPC) contract to MHI.
While the termination of the settlement agreement would discharge certain liabilities, the novation of the EPC contract and the division of the remaining payments are expected to result in the group giving up certain rights to some proceeds from the construction revenue, Hyflux said.
However, the new agreement would resolve uncertainties and "create a more stable condition" for the group's ongoing debt restructuring exercise, it added.
Hyflux investor Aqua Munda is now inviting the company's noteholders and unsecured creditors to offer their debts for purchase at a minimum discount of 85 per cent.
The invitation began at 9am on Dec 30 and will expire at 5pm on Jan 23, 2020, unless extended or terminated earlier, the Singapore-registered company said in its invitation memorandum on Dec 27.
The invitation is open to holders of Hyflux's 4.25 per cent notes due 2018, as well as its 4.6 per cent and 4.2 per cent notes due 2019.
It is also open to holders of other senior unsecured debts, contingent debts, and trade and other debts of Hyflux and three of its subsidiaries: Hydrochem, Hyflux Membrane Manufacturing and Hyflux Engineering.