Judicial Managers appointed to oversee the debt restructuring of Hyflux Group has filed an application to the Court on Friday (4 June) to wind up the company.
This announcement was made by the Court appointed Judicial Managers from Borrelli Walsh about Hyflux Ltd and its subsidiaries, namely Hyflux Group and posted on the Singapore Stock Exchange (SGX).
The managers were earlier appointed on 17 November last year, a day after an Order of Court was made in response to the judicial management application filed by an unsecured working group (UWG) of bank lenders on 13 August. These creditors include Mizuho, Bangkok Bank, BNP Paribas, CTBC Bank, KfW, Korea Development Bank, and Standard Chartered Bank.
In the announcement, the Judicial Managers shared that there is only one bid out of the seven that it received for the entire Hyflux Group.
And since the negotiations with the sole investor keen on an investment in the entire Hyflux Group were unsuccessful, they said that “consequently a restructuring not possible, the continuation of the judicial management of the Company is no longer necessary.”
The Judicial Managers noted that the remaining six bids involve the purchase of individual assets in the Hyflux Group and can be facilitated through a winding up of the Company.
Following the conclusion of the investor process, the Judicial Managers said that they have formed the view that the objectives of the judicial management are no longer capable of achievement and the remaining value of the Hyflux Group are best realized in a liquidation.
High profile debt restructuring of Hyflux
The application to place debt-ridden water treatment firm Hyflux under judicial management was only approved by the High Court after it had granted 10 extensions to Hyflux, despite the existing poor corporate governance and mismanagement which have led to its collapse.
It was estimated some 34,000 retail investors had invested a sum of around S$900 million dollars in Hyflux preference shares and perpetual securities offered via two tranches in 2011 and 2016.
In March 2019, it was reported that around 500 people went to Hong Lim Park to protest against Hyflux after losing 80 to 97 per cent of their life savings and retirement funds invested in Hyflux preference shares and perpetual securities.
Furthermore, outstanding notes are also due, which amount to S$100 million (4.25 per cent) in 2018, S$65 million (4.6 per cent), and S$100 million (4.2 per cent) in 2019.
Hyflux had also called for its creditors to file proofs of claim, allowing the creditors such as trade creditors and bank lenders to receive payments as well as to vote on the scheme proposals during the scheme meeting with UAE utility company Utico in April 2019.
Prior to this, 73 parties had filed proofs of claim totalling S$3.51 billion as a preliminary before the scheme meetings. This took place while the Indonesian investment firm Salim-Medco was still offering the rescue package deal.
During this time, some of the biggest claim amounts were filed by retail PnP investors. Medium-term noteholders were claiming S$277.7 million, holders of S$400 million (8 per cent preference shares) were claiming S$429.3 million, and holders of S$500 million (6 per cent perps) were claiming S$540.7 million.
The Tuaspring desalination plant, which is part of Hyflux’s Tuaspring IWPP project, was the largest seawater treatment plant integrated with a power generator in Singapore that supplies 70 million gallons of treated water per day for 25 years.
Costing Hyflux S$1.05 billion, this project was taken over by Singapore’s national water agency Public Utilities Board (PUB) last year after PUB terminated its Water Purchase Agreement (WPA) with Hyflux – due to the company’s financial debt.