PUB issues notice to take over Hyflux's Tuaspring desalination plant

Singapore

NATIONAL water agency PUB has issued a takeover notice to Tuaspring Pte Ltd (TPL) to take over the desalination plant and terminate its water purchase agreement with parent Hyflux.

The termination notice provides a 30-day notice period before PUB takes over the desalination plant, the agency said in a statement on Wednesday.

PUB will acquire the loss-making Tuaspring desalination plant for zero dollars, leaving Hyflux to own and run the Tuaspring power plant, which sits on the same site.

The notice comes after Hyflux terminated a planned S$530 million rescue deal with Indonesian investors led by Anthoni Salim earlier this month.

This investment was crucial to help TPL cure its defaults under the water contract, as it is loss-making and requires financial support from Hyflux to replace poor-performing membranes in the desalination plant, and to restore it to a reliably operational level.

PUB has earlier agreed to give TPL until April 30 to cure its defaults, on condition that PUB could rescind the extension if the Salim rescue deal falls through. PUB is now expected to take control of the Tuaspring desalination plant in early May.

The termination of the WPA is expected to have a material impact on the financial performance of the group, Hyflux said.

Meanwhile, Singapore's regulators are looking into the conduct of Hyflux to see if any rules were broken.

The Monetary Authority of Singapore (MAS), the Accounting and Corporate Regulatory Authority (Acra) and the regulatory arm of the Singapore Exchange told The Business Times in a joint statement on Tuesday: "MAS, Acra and SGX RegCo are currently reviewing Hyflux-related disclosure issues, as well as compliance with accounting and auditing standards, to determine if there have been breaches of listing rules and/or the relevant laws and regulations."