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Hyflux gets third extension on creditor's deadline to find buyer for Tuaspring

HYFLUX has got its third extension of the deadline to find a buyer for its loss-making Tuaspring water and power plant, the cash-strapped water company said on Tuesday.

Major lender Malayan Banking (Maybank), which is Tuaspring's only secured creditor, has agreed to push back the deadline to Dec 28, from Nov 29 previously.

Hyflux originally had until Oct 15 to execute a binding agreement with a successful bidder or investor for Tuaspring, in a deal reached with Maybank in July. The lender had agreed at the time to hold off on enforcement proceedings against Tuaspring, its properties and its assets.

While Maybank has now given its in-principle approval for the extension, the terms of the agreement still apply, including Maybank's right to terminate the collaboration agreement if the new deadline is breached, Hyflux noted in its latest bourse filing.

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Hyflux's restructuring initially came up against founder Olivia Lum's preference for divesting Tuaspring at no less than its book value, or S$1.47 billion as at end-March. State-linked Sembcorp Industries was the only approved bidder for the project, with Bloomberg reporting that the offer was under book value.

Meanwhile, two Indonesian white knights have floated a S$400 million equity injection, in exchange for a 60 per cent stake in Hyflux. Salim Group and Medco Group also offered a shareholder's loan of S$130 million and a debtor-in-possession loan of S$30 million in October's joint rescue plan.

Hyflux has previously said that, in light of this offer, a voluntary sale of Tuaspring will no longer be actively pursued. According to a frequently asked questions section on its website, Hyflux is working with rescue consortium SM Investments to talk to Maybank about this.

In its search for more cash, Hyflux recently divested its 50 per cent interest in an Indonesian bottled water vendor for S$32 million, at a loss of S$300,000 against the net asset value of its shareholding.

Trading in Hyflux shares remains suspended.