Sias urges Hyflux to chase Salim-Medco for updates on rescue deal

FIRST came a default notice from the national water agency, followed by an announcement that Hyflux's scheduled townhall meetings with retail investors would be postponed indefinitely.

Then, potential white knight Salim-Medco asserted its right to back out of a crucial rescue deal for Hyflux last week.

Since then, both sides have gone silent about what would happen next.

That's thrown the fate of Hyflux into uncertainty, and retail investors want to know what Salim-Medco is planning, the Securities Investors Association (Singapore) or Sias said on Monday. 

Sias chief David Gerald wrote in an open letter to Hyflux: "Can the board advise that Salim-Medco's proposal is still on the table and that they have not given any reason to withdraw from the agreement?"

He added: "The recent PUB statement that they should not use its default notice as a reason to walk out is causing worry to retail investors. There is no other option on the table. The company is not giving confidence to investors that it will resolve all outstanding issues to keep the restructuring deal with Salim-Medco on track."

Mr Gerald told The Business Times (BT) that Sias has received hundreds of calls from small investors who are anxious and confused: "There is much confusion about whether Salim-Medco is in or not. Tell us, is Salim-Medco in or not?"

He noted that as of now, Hyflux has not said that the scheduled scheme meeting on April 5 is cancelled. But Hyflux must apply to the Singapore High Court first if it wants to delay the vote.

Neither has Hyflux issued a revised scheme document to incorporate amendments it agreed to make on March 8 that would allow retail perpetual and preference shareholders to share in more upside in the proposed restructuring.

With a week to go before April 5, there is no certainty that Salim-Medco's S$530 million rescue plan proposed last year is still on the table, and no clarity over what will happen to investors if the deal is dead.

Mr Gerald wrote in the letter: "Could the board address all the above concerns immediately, please?"

A lawyer for Salim-Medco said he was not allowed to talk about the deal when phoned by BT on Monday.