Hyflux novates TuasOne project to Mitsubishi
Singapore
HYFLUX has terminated a previous settlement agreement with Mitsubishi Heavy Industries (MHI) in relation to its TuasOne waste-to-energy project.
Instead, a new agreement was signed on Thursday which novated its engineering, procurement and construction (EPC) contract to MHI.
The new deal also covers the division between MHI and Hydrochem of the remaining payments to be made under the EPC contract, and the discharge of certain claims, including a resolution of the matters raised by Hydrochem against MHI via an arbitration notice it filed earlier in January this year.
Under the previous agreement in February, MHI agreed to an early injection of an additional S$23 million equity, if there is a firm deal between the parties by end-January.
The deal would help to address the liquidity problems and ensure completion of the S$750 million project, Hyflux founder and chief executive officer Olivia Lum said in an affidavit on Jan 11.
The old agreement also included the making of payments to subsidiaries of MHI as subcontractors for the TuasOne project, the discharge of certain claims including those between Hyflux and Hydrochem on one hand and MHI on the other, and addressed certain operational matters regarding the project so as to facilitate its completion.
In a regulatory filing on Thursday, Hyflux also noted that entry into the new settlement agreement and the deed of novation was necessary to ensure continued funding for the project, notwithstanding the ongoing debt restructuring of the group.
The novation is expected to have a material effect on the group's financial performance, Hyflux said, without disclosing further details of this impact.
