SINGAPORE: National water agency PUB will be taking over troubled water treatment company Hyflux's Tuaspring desalination plant.
It issued a notice to Tuaspring on Wednesday (April 17) to terminate its water purchase agreement with the company, PUB said in a press statement.
The national water agency will subsequently take over the desalination plant after a 30-day notice period.
Tuaspring is at the heart of its parent company Hyflux's financial problems. The once shining star of Singapore companies had liabilities amounting to $2.95 billion as of March 31 last year.
Affin Hwang Research said in a research note on Tuesday Malayan Banking Bhd (Maybank) is a major financier of Hyflux’sTuaspring and TuasOne.
To recap, Maybank has a total exposure of RM1.95bil (S$658.6mil) to Hyflux since September 2013, which covers project financing for: i) Tuaspring’s Integrated Water and Power Plant (IWPP) (S$602.4mil) and ii) TuasOne Waste-to-Energy Plant (S$56.2mil, to be ready by May 2019).
As at 2Q18, Maybank had set aside collective provisions totaling RM315.1mil.
"Nonetheless, we keep our earnings forecasts unchanged pending more developments and clarity from the situation. Based on a worst-case-scenario, the Public Utilities Board of Singapore will take over the loss-making Tuaspring Desalination Plant without any compensation for Tuaspring," said Affin Hwang Research.
Click here to read full report by Singapore Straits Times:
PUB serves notice to take over Tuaspring desalination plant from Hyflux