Hyflux gets waivers, extensions for AGMs and results pending reorganisation

HYFLUX is now required to convene its annual general meetings (AGMs) for both FY2018 and FY2019 by Sept 30, 2020.

The debt-laden water treatment firm, which faces a proposed reorganisation based on Utico's rescue package, must also file its annual returns for FY18 and FY19 with the Accounting and Corporate Regulatory Authority (Acra) by Oct 31, 2020.

Acra and the Singapore Exchange (SGX) have approved these further extensions of time, Hyflux said in a bourse filing on Thursday.

It received another three-month extension for each of the AGMs. This means the FY18 meeting has been pushed back by 17 months so far, while the FY19 meeting deadline has been extended by five months in total.

As for the unaudited full-year financial statements for both FY18 and FY19, Hyflux is now required to announce them by Aug 31, 2020, after SGX granted further four-month extensions.

However, for Q1 to Q3 of FY19, Hyflux does not need to announce its financial statements. This is because the bourse operator has approved waivers to dispense with this requirement for the three quarters, Hyflux said on Thursday.

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The company also does not need to release its Q1 FY20 financial statements and any subsequent quarterly financial statements, until the reorganisation is completed.

On April 28, 2020, Hyflux wrote to SGX and Acra separately to request their approvals for these waivers and time extensions.

"The level of certainty in completing the reorganisation has a direct impact on the company and the group's basis for preparing our financial statements on a going concern basis," Hyflux said on Thursday.

The company's auditors have advised that the use of the going concern basis of accounting would be the most appropriate, useful and relevant only if the reorganisation has "a reasonable basis to be successful", which is in turn premised on the requisite meetings and due process having taken place, Hyflux added.

Based on the indicative timetable set out in the explanatory statement dated March 17, 2020, the relevant meetings for the reorganisation should have taken place in the months of April and May this year. 

However, in light of the Covid-19 pandemic, Hyflux last month filed urgent applications to the High Court to vary the timelines to convene the scheme meetings when creditors will vote on Utico's rescue deal. The court has since ordered that the scheme meetings on April 22 and 23 be postponed to a later date to be decided. The moratorium was also extended to July 30.

Releasing financial results before the requisite meetings and due process have taken place may potentially result in an inaccurate and incomplete reflection of financial information to investors, Hyflux said on Thursday.

With the financial statements for FY18, FY19 and Q1 FY20 prepared on a going concern basis, the market will be able to better assess the financial impact of the reorganisation, it added.

The company is still exploring alternative means of conducting its scheme meetings and AGMs, for instance via remote teleconferencing, amid the ongoing coronavirus pandemic and nationwide "circuit-breaker" measures.