Hyflux slapped with US$57.7m claim by BNP Paribas for Magtaa performance bond

HYFLUX has received a notice from BNP Paribas demanding payment of US$57.7 million, it said on Monday. 

The French bank is claiming the sum in respect of a performance bond that it issued to Hyflux associate company Tahlyat Myah Magtaa (TMM) in Algeria.

Hyflux owns a 47 per cent stake in TMM, which is the project company for the Magtaa desalination plant in Algeria.

Hyflux had said on April 23 that it was aware of a claim of approximately US$56.5 million made by TMM in respect of the performance bond issued by BNP Paribas El Djazaïr, but disputed TMM's right to make such a claim. 

BNP Paribas has since declared a sum of US$57.7 million to be due and payable. This sum includes the claim amount and handling commission, fees and charges, including those due and payable from the period of April 1, 2018 to May 8,2019.

Hyflux said that it is taking appropriate legal steps, and has filed an injunction application against the issuer of the performance bond that guarantees payment of claims by TMM.

The demand from BNP Paribas is expected to have a material impact on the financial performance of the group, Hyflux said.

The insolvent water treatment firm has been under a court-sanctioned debt moratorium for close to a year now.

On Tuesday, a Singapore High Court will hear an application from Mizuho, KfW, Bangkok Bank, BNP Paribas, CTBC Bank and the Korea Development Bank, which wish to be carved out of the moratorium. The court will decide on Tuesday whether they can be carved out.

If a carve-out is approved, these banks plan to file an application to appoint judicial managers over Hyflux and Hydrochem to replace the present Hyflux management.