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Maybank demands another S$33.6 million from Hyflux's unit, over hedging deal
MAYBANK has demanded payment of another S$33.6 million from Tuaspring, the subsidiary of the debt-ridden water treatment company Hyflux.
Hyflux in a regulatory filing on Monday announced that Malayan Banking (Maybank) had notified Tuaspring of the latter's early termination of one of these hedging agreements dated Nov 22, 2013, pursuant to certain alleged events of default and termination events.
Maybank had designated July 7 as the early termination date in respect of all outstanding transactions under the Nov 22, 2013 agreement. The bank issued a calculation statement to Tuaspring on July 12, asserting that the amount payable in respect of the early termination is S$33.6 million.
The hedging agreement entered into was part of Tuaspring's financing arrangements. Currency exchange fluctuations and interest rate movements directly impact the exposure under the hedging agreement.
The amount demanded is on top of the S$509.1 million and US$44.5 million being sought by Maybank, as the latter two sums were drawn down under the term loan facilities and the cash cover for contingent liabilities respectively.
National water agency PUB took over the loss-making Tuaspring desalination plant in May, following the termination of the Water Purchase Agreement (WPA) with Tuaspring.
Hyflux's debt moratorium ends on Aug 2.