Hyflux calls for trading suspension of shares, perpetual securities
Water treatment company reaches out to SIAS after seeking court protection
Hyflux called for a trading suspension of its shares and perpetual securities yesterday as shareholders tried to digest the news that the water treatment firm is seeking court protection.
Later in the evening, the company announced the resignation and departure of group executive vice-president and group chief operating officer Wong Lup Wai. Mr Wong had joined Hyflux in 2013 and was appointed to the posts in 2014.
He will leave at the end of the month.
He was responsible for Hyflux's global projects execution, operations and maintenance, engineering resources, as well as developing group-wide strategies in the areas of manufacturing, procurement, and membrane and systems sales.
Retail investor body the Securities Investors Association of Singapore (SIAS) said that Hyflux has reached out to it. Hyflux has reassured SIAS that the company will actively engage stakeholders as it reorganises its business.
Over the next 30 days, the water project developer will have to come up with a convincing business plan to satisfy its key lenders - and the Singapore High Court - that it deserves a six-month moratorium to revive its business and reorganise its debts.
Hyflux has appointed Ernst & Young Solutions as its financial adviser and WongPartnership as its legal adviser.
NUS Business School Associate Professor Lawrence Loh said: "Hyflux's ongoing reorganisation move is necessary to ensure that any asset divestments will get the best value for its stakeholders, particularly creditors and shareholders."
He summed up some of the shareholders' sentiments when he noted that: "While there were already market expectations for the troubles at Hyflux, the issue has probably brewed for a time much longer than necessary.
"Hyflux has probably seen this coming and could have been more expeditious and decisive in its restructuring efforts along the way."
Market observers agree that a six-month moratorium would allow Hyflux to focus on two ongoing projects that are nearing completion.
The first is the TuasOne waste-to-energy (WTE) plant in Singapore, which is slated for completion next year.
TuasOne was valued at around $750 million in 2015 and Hyflux owns a 75 per cent stake.
The second is the US$250 million Qurayyat desalination project in Oman, which faced delays but has entered its final stages of testing and commissioning.
Hyflux has an 85 per cent stake in the facility.
Once these assets are operational and generating income, they are likely to fetch a better price when sold.
- THE STRAITS TIMES
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