Hyflux takes $916m impairment hit for 9 months ending Sept 30

Hyflux has taken a $916 million impairment charge for the nine months ended Sept 30, 2018, relating to a loss while adjusting the carrying value of Tuaspring water and power plant, and other write-downs.

Hyflux submitted its latest statement of financial position to the High Court last Friday, in which the impairment figure was released.

The investment holding company, which caters to Singapore's water and fluid treatment segment as well as liquid separation applications for the manufacturing sector, said the pro-forma restructured financials were prepared for "illustrative purposes only".

"...Hyflux intends to commission a further valuation to be undertaken by a different valuer for the purposes of finalising the 2018 full year financial results," it said.

Mr David Gerald, president of the Securities Investors Association (Singapore) or Sias, said the provision for impairment was needed to reflect the "true value" of Hyflux's assets amid the restructuring exercise.

The impairment has put the Hyflux group in a net liability position of $136 million, indicating that the group is insolvent. Mr Gerald said: "Hyflux will thus be valueless if no restructuring is done."

However, if creditors consent to haircuts under its proposed restructuring scheme, Hyflux will return to a net asset position of $1.1 billion, according to the group's pro forma calculations.

Mr Gerald said: "This means that the company may have positive value post restructuring." - REUTERS, THE STRAITS TIMES