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Hyflux Ltd sells stake in Indonesian bottled water firm for S$32m
WATER treatment firm Hyflux Ltd, which remains in the midst of restructuring its debt even as it secured a white knight about a month ago, on Monday said that it has sold its 50 per cent stake in a firm that sells bottled drinking water in Indonesia for S$32 million. The sale price reflects a loss of S$300,000 against the net asset value of Hyflux's shareholding in the bottled drinking water firm.
The sale of shares held in the firm PT Oasis Waters International was done through Hyflux's consumer products unit, Hyflux Consumer Products. The buyer was an investment company based in Hong Kong.
The shares reflected a net tangible asset value of S$32.3 million, meaning that the sale price was at a "deficit" of S$300,000, Hyflux disclosed.
Hyflux Consumer Products will first use about S$13.9 million of the sale proceeds to repay inter-company payments due to a wholly owned subsidiary of Hyflux, and then to Hyflux itself. The remaining sale proceeds will then be used as a subordinated loan from Hyflux Consumer Products to Hyflux, and thereby be channelled for the group's working capital purposes.
"The decision was made to undertake the disposal as part of the company’s efforts to streamline its business activities and to re-focus on its core activities in the infrastructure sector," said Hyflux.
Hyflux in October secured white-knight investment amid its buckling debt, as SM Investments, a consortium between Salim Group and Medco Group, stepped in to offer a S$400 million equity injection in exchange for a 60 per cent stake in the company once Hyflux has settled all its debts.
SM Investments will also grant Hyflux a shareholder's loan of S$130 million and a debtor-in-possession loan of S$30 million to help finance it through the restructuring. The deal is subject to the approval of creditors, as well as national water agency PUB and other authorities. The deal will include debt-for-equity swaps since Hyflux does not have enough cash to clear all its debts.