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PUB serves Hyflux 30-day notice for takeover of Tuaspring desalination plant
THE Public Utilities Board (PUB) has issued a notice to debt-ridden Hyflux to take over its biggest asset, the Tuaspring desalination plant, and terminate the parties' water purchase agreement.
The termination notice to Hyflux unit subsidiary Tuaspring Pte Ltd (TPL) provides a 30-day notice period before PUB takes over the plant, the national water agency said in a media statement on Wednesday.
PUB had announced on March 21 that it would take over Tuaspring - the largest of three desalination plants in Singapore - to safeguard the country's water security unless Hyflux could fix defaults in meeting its contractual obligations by April 5, a deadline later extended to April 30. PUB disclosed then that TPL had failed to keep the plant reliably operational and expressed worries over its financials
The takeover would be at zero dollars, given the plant's current negative valuation, with PUB waiving any compensation it could have claimed from Hyflux given the insolvent company's S$2.95 billion debt load.
Earlier this month, Hyflux called off a lifeline deal with Indonesian consortium SM Investments with just weeks to go before it loses court protection from creditors when its debt moratorium expires on April 30.
Compounding its woes, Singapore regulators are reviewing the company's disclosures to determine if it has breached any listing rules and/or laws and regulations.
On Monday, Hyfux filed a lawsuit against its former suitor in the Singapore High Court for the repudiation of the rescue deal, claiming the S$38.9 million deposit. It also hired restructuring specialist nTan Corporate Advisory as adviser for its ongoing court-supervised reorganisation process.