(Photo - Hyflux)

“Too premature” to discuss new rescue plan for Hyflux: Firm’s lawyer Manoj Sandrasegara

Despite its looming debt moratorium at the end of this month, troubled water treatment firm and genco Hyflux has declined to make any speculations on its new restructuring plan, following its termination of a $380mil bailout deal with Indonesian conglomerate Salim-Medco Group – via its Singapore arm SM Investments – last week.

Speaking at a case management conference at the High Court on Thu (11 Apr), Hyflux’s lawyer Manoj Sandrasegara of WongPartnership told Justice Aedit Abdullah and lawyers representing Hyflux’s creditors that it is “too premature” to discuss a new rescue plan, The Straits Times reported.

Mr Manoj added that the firm has yet to settle on a further extension of the court-ordered debt moratorium, which protects Hyflux Group from its creditors.

“If we do intend to apply for the moratorium to be extended, we will need about 10 days to two weeks to talk to the creditors about our next steps,” he said.

Justice Aedit, in asking whether Hyflux will seek an alternative to liquidation, cited a letter the court had received from retail investor Violet Seow, which read that she has “no confidence in the restructuring attempt”, and that she is opposed to the further extension of the debt moratorium.

Mr Manoj replied that Hyflux will address the issues raised by investors such as Ms Seow, particularly those from senior unsecured groups, adding that “all options are on the table”, according to CNA.

The judge had urged Hyflux to devise “something fairly tangible” in order to convince the court to grant the firm another extension, CNA reported.

“I have expressed on various occasions that I have to be persuaded that there is something tangible before I can extend the moratorium.

“It has been taking a while and I appreciate that this is a complex restructuring … I expect that if the company want more time, that something will be put together,” Justice Aedit was quoted as saying by ST.

The case conference will resume on 25 Apr.

Hyflux, drowning in S$2.7 billion in liabilities as of the end of Sep last year, has given up on a “$380 million rescue package” from Salim, which was offered “in exchange for a 60% stake” in the water treatment company, as a result of the termination of the bailout deal with SMI.

Securities Investors Association Singapore (SIAS) chief executive officer David Gerald told The Straits Times that he has contacted Hyflux founder Olivia Lum as to whether the firm has a backup plan or safety net for its stakeholders.

Mr Gerald said: “According to her, the board will quickly re-engage with previous interested parties who had shown keen interest and were bidding for Hyflux with SMI.

“She said that the board needs some time to negotiate with interested parties and has asked that they be given some time and space to work on an alternative proposal to avoid liquidation,” he added.

Additionally, Mr Gerald has conveyed to Ms Lum the “dissatisfaction” of the retail investors with the Salim-Medco bailout agreement initially, and had requested the company to consider the retail investors’ apprehension when discussing a new deal.

“In the circumstance, Sias calls on all stakeholders to allow Hyflux time and space to work out an alternate solution and support the board to provide the solution,” said Mr Gerald.