Maybank intends to appoint receivers and managers for Tuaspring assets

MAYBANK has terminated its collaboration agreement with Hyflux and Tuaspring, and intends to appoint receivers and managers over the assets of Tuaspring apart from the desalination plant and shared infrastructure, Hyflux said in a Singapore exchange filing in the early hours of Friday.

Maybank is Tuaspring's only secured creditor. Under the collaboration agreement, dated July 5, 2018, Hyflux had agreed to continue seeking potential investors with a view to divesting its interest in Tuaspring's integrated water and power project (IWPP).

Hyflux was to execute a binding agreement for the full settlement and discharge of Maybank's total liabilities by a specified deadline - originally Oct 15, 2018 - but subsequently extended several times, most recently until March 31, 2019. In return, Maybank was to refrain from commencing enforcement proceedings against Tuaspring or its properties and/or assets.

Hyflux said that it and Tuaspring received, on April 18, a letter from Maybank terminating their collaboration agreement with immediate effect. As there had been no execution of a binding agreement by the extended deadline, this "constitutes a breach which is incapable of remedy under the collaboration agreement" and entitles Maybank to terminate it, Hyflux noted in the announcement.

Hyflux said it has also received notices to PUB and the Energy Market Authority of Singapore issued by Maybank, regarding enforcement and acceleration of the maturity of all amounts owing under the Tuaspring financing documents. The notices are pursuant to a Nov 21, 2013, agreement between Tuaspring, PUB and Maybank.

"Maybank has also stated its intention to appoint receivers and managers over the assets of Tuaspring save for the desalination plant and shared infrastructure," said Hyflux. "In the interim, the operations of the power plant at the Tuaspring IWPP are expected to continue as usual."

Hyflux said the termination of the collaboration agreement is expected to have a material impact on its financial performance and that it will make the appropriate announcements as and when there are any further material developments on this matter.