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Hyflux gets court order for Apr 5 scheme meeting

HYFLUX has convinced a Singapore High Court to order a scheme meeting for creditors on April 5, where they will vote on whether to accept its proposed rescue plan.

Justice Aedit Abdullah also ruled on Thursday that holders of Hyflux's S$400 million perpetual preference shares issued in 2011 and S$500 million perpetual capital securities issued in 2016 will be schemed as one class, as proposed by Hyflux.

"I am satisfied that the classification taking perps and prefs together is appropriate as they have same rights under insolvency," he decided, after considering an objection from the perps trustee.

On April 5, creditors will be split into respective classes to vote on the deal.

Perp and pref holders with total claims of S$900 million will vote as one class.

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Separately, medium-term noteholders, unsecured bank lenders, contingent claimants and a smaller portion of other claimants with total claims of S$1.684 billion will vote as one class, according to Hyflux's latest figures.

The scheme needs to be approved by at least 75 per cent in value and 50 per cent in number of both classes of creditors.

If this condition is not met, Hyflux can still proceed with the restructuring, so long as a majority in number of creditors representing 75 per cent in value of claims vote "yes".

By law, creditors who hold their securities under custodians such as depository agents won't be counted in a tally of votes by number, but an order was granted to "enfranchise" them on Thursday.

So, creditors who hold their securities via a direct CDP account, as well as those whose securities are held through regulated depository agents and CPF/SRS agent banks, can attend the meeting as proxies and vote in person.

Although Thursday's proceedings were geared only towards the question of whether a scheme meeting should be called, Justice Aedit allowed one retail investor to air her concerns before the court.

Loo Leong Hun, a perp and pref shareholder, questioned if there was a need for retail investors to take a write-down, when they were willing to waive their coupons and accept staggered or no capital redemptions until Hyflux sees better days.

"In this given proposal, there is no given obligation to redeem capital or interest," she said, noting that both perps and prefs had previously been classified by Hyflux as equity. "We are a benign equity and not a toxic debt to Hyflux."

Justice Aedit replied: "Unfortunately Mdm Loo, my role right now is very limited. Under the Companies Act, what I can do at this point is to see that the minimum requirements for a meeting are met ... and to ensure that there is sufficient information going out."

Hyflux will hold a third round of townhall meetings with retail investors on March 13 to discuss the proposed scheme.

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