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No serious bids yet for Tuaspring, Hyflux says

NO serious bids have been made yet for Hyflux's sale of Tuaspring, although there are now eight interested parties at various stages of the bidding process, Hyflux chief executive Olivia Lum said on Thursday.

"What (price) we will accept, we cannot disclose now. We will want to see what reasonable bids are on the table. We all know that under these conditions when the power market is weak, it is very difficult to get good value. But it also cannot be so unreasonably low that I can't even pay my stakeholders," she said.

Ms Lum was speaking to reporters at the Hyflux Innovation Centre, in between townhall meetings with bondholders, perpetual securities holders and preference share holders.

A Singapore Court has given Hyflux six months to mid-December to complete a debt restructuring. Proceeds from the sale of the Tuaspring integrated water and power plant will help Hyflux clear some of its debts.

It has been in talks with four interested buyers since June. Some have dropped out of the bidding process though there has also been some new interest, said chief financial officer Lim Suat Wah.

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While some bidders are still waiting for water agency PUB's approval before they can start looking at Tuaspring, others have received it and have already gained access to Hyflux's dataroom, she added.

Because Tuaspring is a strategic asset, bidders are required to agree to confidentiality periods that are longer than usual. The PUB also has to approve every name that comes through the door, Ms Lum said.

Binding bids will have to be made by an Oct 1 deadline. Hyflux's main lender Maybank has given it until Oct 15 to ink a binding purchase agreement. 

So far, the eight interested parties comprise a "good mix" of both foreign and Singapore companies.

EY partner Angela Ee, who is advising on the refinancing, emphasised that Hyflux's company management team has been spending a lot of time seeking out strategic investors.

Ms Ee said: "For a group like this to move forward, we do need new money coming in, and we're talking about long-term strategic money because this is a EPC (engineering, procurement and construction) business. To win new projects and to work on them, you really need a lot of money."

Meanwhile, Hyflux has signed non-disclosure agreements with 19 interested parties for possible rescue financing. None of the 19 are Hyflux's current bank lenders. 

As yet, Hyflux's shareholders, noteholders, perp and preference shareholders still have very little indication of what the restructuring process might mean for them. 

Progress will take time as Hyflux is dealing with a massive group of stakeholders. It has 34,000 perp and preference shareholders, 16,000 shareholders and 29 lenders, it said.

Smitha Menon of WongPartnership said: "Banks at the senior unsecured level have only in the last two weeks just formed a working group. We have to get the perp and preference holders to likewise organise themselves into a steering committee or representative group. Once that's done then we sit down and start talking to negotiate a plan. Once we have a plan, then we'll start the consent solicitation."

The purpose of the townhall meetings taking place on Thursday and Friday is to explain the company's situation to its stakeholders before it tries to draw up a plan, Hyflux said.

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