Pic by Straits Times, Singapore
KUALA LUMPUR: Singapore-listed Hyflux Ltd has obtained a month's extension until Jan 31, 2019 from Malayan Banking Bhd
to ink a binding agreement for its Tuaspring integrated water and power plant (IWPP).
In announcement to the Singapore Exchange (SGX) on Monday, it said it had obtained the bank's approval again for more time to undertake the Tuaspring divestment to a successful bidder.
According to earlier announcements, Maybank is Tuaspring’s only secured creditor.
Maybank had provided Tuaspring with banking facilities which are secured by various collaterals and securities over Tuaspring’s properties and assets, including its IWPP.
Under the earlier agreeements, Hyflu planned to execute a binding agreement with a successful bidder or investor by Oct 15, 2018.
The next step then was to obtain approval for the transaction from Maybank, the Public Utilities Board and/or the Singapore High Court (if necessary) by Dec 11, 2018 and obtain the approval of the shareholders by Feb 4, 2019.
Recall, Maybank’s exposure to Hyflux group totalled RM1.95bil (S$658.6mil) which comprised of S$602.4mil to Tuaspring’s IWPP and S$56.2mil to TuasOne’s waste-to-energy plant (TuasOne).
The group’s exposure to Tuaspring comprised 83% in the form of a term loan for the development of its water and power plant and 17% in the form of a standby letter of credit and marked-to-market derivatives for interest rate and commodity hedging.
On Oct 18, Hyflux Group announced that it has entered into a restructuring agreement with SMI Investments Pte Ltd (SMI).
SMI, a white knight, is a consortium formed between Salim Group and Medco Group.
Salim Group is experienced in system integration, optimisation of water treatment, waste management as well as in power generation.
Meanwhile, Medco Group has a strong track record in energy, renewables, utilities and gas businesses across Southeast Asia.
Both Salim Group and Medco Group are seen to be reputable parties with the necessary expertise that could provide leverage to Hyflux to continue its project.
Under the restructuring SMI will take up 60.0% of the enlarged share capital of Hyflux Ltd for S$400mil.
New shares will be issued to SMI. In addition, SMI will provide a loan of S$130mil to Hyflux (shareholder’s loan).
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