Hyflux yet to seek extension of debt moratorium

Singapore

HYFLUX will restart talks with its creditors to explore outcomes other than liquidation, but has not decided yet on whether it will seek an extended debt moratorium from the Singapore High Court.

WongPartnership lawyer Manoj Sandrasegara, who represents Hyflux, told a case management conference on Thursday: "I have no instruction at this stage to apply to extend the moratorium.

"Briefly I think all options are on the table for the company and the company intends to have discussions with all senior unsecured groups."

The update comes after Hyflux last Thursday terminated a crucial rescue deal, with just weeks to go before the insolvent water and power plant company loses court protection from creditors when its moratorium expires on April 30.

The deal was killed after SM investments, the Indonesian investor group led by billionaire Anthoni Salim, failed to show commitment to its earlier agreement to inject S$530 million into Hyflux.

In Court on Thursday, Justice Aedit Abdullah asked how likely it is for Hyflux to cobble together a new rescue plan. Mr Sandrasegara replied: "It's too premature. I can't say much."

He did not say more, but Hyflux's new search for a saviour will likely begin with those parties who went up against Salim with rescue offers last year.

Before Hyflux picked Salim to be its white knight last October, it had conducted a competitive bidding process and entered non-disclosure agreements with 16 potential investors, including strategic Chinese businesses, as well as South-east Asian regional conglomerates.

Discussions were later narrowed down to eight parties. Out of the eight, some submitted non-binding term sheets.

Their offers ranged from a total investment of S$400 million to S$600 million. However, it is unclear if these parties would still be keen on a deal.

In Court on Thursday, none of the lawyers representing Hyflux's various stakeholders was impatient for its moratorium to be lifted.

But Justice Aedit noted that some retail investors might feel otherwise.

He cited an e-mail he had received from retail perpetual securities holder Violet Seow: "She has expressed that she has no confidence in the restructuring attempts and says that the company should basically not be allowed to extend the moratorium for too long."

Justice Aedit stressed that if Hyflux hopes to push out the expiry date of its court moratorium, he will need to see a feasible plan before he can agree to grant them more time: "I will have to be persuaded that there is something fairly tangible before I can extend the moratorium further. It's been taking a while."

Hyflux's next status conference will take place on April 25. If Hyflux wants to apply to extend the moratorium, it must do so by April 25.