Hyflux’s deal with SM Investments may be terminated due to Tuaspring defaults
Hyflux said it received a notice from investor SM Investments which cautioned that the default notice from the PUB regarding Tuaspring may cause the investor to ‘assert the right to terminate the restructuring agreement'.
Water treatment firm Hyflux has flagged that its restructuring agreement with Indonesian investor SM Investments may face termination if the defaults from the firm’s water and power plant subsidiary Tuaspring is not remedied in two weeks.
In a regulatory filing on Monday, the firm said it received a notice from investor SM Investments, which spoke on the default notice Singapore’s water agency the Public Utilities Board (PUB) had slapped on Tuaspring on March 5 and said that the issue may allow SM Investments to ‘assert the right to terminate the restructuring agreement'.
PUB had said that it will exercise its right to terminate the agreement and ‘take control of the plant’ if the defaults are not fixed in the 30 days. Tuaspring has a 30-day deadline from PUB's default notice to remedy any defaults from the agreement between the firm and the government.
Two-week notice to resolve Tuaspring’s issues
In the Singapore Exchange (SGX) filing, Hyflux said the restructuring agreement between them and SM Investments - which includes a S$530 million restructuring deal - entitles the investor to terminate the restructuring agreement if a ‘prescribed occurrence’ occurs and is not remedied within two weeks or as mutually agreed.
Hyflux or Tuaspring ceasing or threatening ‘to cease for any reason to carry on its business in the usual and ordinary course’ is seen as a ‘prescribed occurrence’ within the framework of the restructuring agreement, said Hyflux.
SM Investments has told Hyflux in its notice the water treatment firm has two weeks to remedy the above-mentioned ‘prescribed occurrence’, and if it is not remedied by April 1, which is the end of the two-week notice, it may ‘assert the right to terminate the restructuring agreement’.
Hyflux said the firm and Tuaspring are seeking legal advice on the investor notice and are in communication with PUB and SM Investments on the notices received from both parties.
The water treatment company said it will make the appropriate announcements ‘as and when there are any material updates or developments’.
Early this month, the firm received S$3.51 billion in proofs of claims from more than 70 parties, including claims from the firm’s retail investors in perpetual securities and preference shares.
But the firm tossed out some claims and has admitted to a total of S$2.81 billion in claims, including those claims for facilities and trade.
Read more on Hyflux takes S$916 million impairment hit for first nine months of 2018.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
