SINGAPORE: Embattled water treatment firm Hyflux was granted another extension in its debt reprieve from creditors by the Singapore High Court on Wednesday (May 29).
With its court-approved moratorium due to end on Wednesday, Hyflux had hoped for an additional four-month leeway, but was denied by Justice Aedit Abdullah who felt that further extensions “should be much more controlled”.
AdvertisementAdvertisementThe debt-laden company now has two more months until Aug 2 to work out possible rescue plans, marking its fourth moratorium extension since embarking on an unexpected debt restructuring a year ago.
During the three-hour long hearing in a court room packed with lawyers, Hyflux provided updates on its search for new investors since aborting a rescue deal with Indonesian consortium SM Investments in April.
Apart from United Arab Emirates utility firm Utico and global multi-strategy investment fund Oyster Bay Fund, WongPartnership lawyer Manoj Sandrasegara, who represents Hyflux, said the company is also in touch with five other unnamed potential investors.
In particular, discussions with Utico are now in the “advanced” stages. The UAE utility firm has given Hyflux a deadline of Jun 17 for a binding agreement to be signed.
AdvertisementAdvertisementMr Sandrasegara told the court that Hyflux continues to be in talks with multiple parties and is looking to “select one investor” by the middle of next month.
After which, it hopes to engage various stakeholder groups to knock out a new scheme of arrangement.
It is looking to file an application to convene the scheme and hold meetings with relevant stakeholders in July, before holding a scheme meeting and seek regulatory approval the following month.
While laying out the company’s case for a four-month moratorium extension, Mr Sandrasegara stressed that its proposed timeline is a “compressed” one with plans already being “expedited”.
But this proposed four-month leeway drew objections from some of the company's creditors.
A group of bank creditors, for instance, said Hyflux should be kept on a “tight leash” and be granted a moratorium extension of just 30 days.
This group of banks, represented by Tan Kok Quan Partnership lawyer Eddee Ng, argued that Hyflux’s goal to sign a binding agreement with an investor by mid-June sets an “identifiable landing point” for when the extended moratorium should end.
Mr Ng also said that previous short moratorium extensions given to the company have not had any chilling effects on negotiations with investors.
“A one month timeframe will allow the company to be kept on tight leash. This is important given that the company already had 11 months of moratorium,” said Mr Ng.
Questions were also raised about the running costs of restructuring and the fees of its advisors, as well as the provision of updates about the progress of the restructuring.
Taking into account the arguments, Justice Aedit said a four-month moratorium extension would not be appropriate.
Still, he said that he is open to giving Hyflux a further extension in August depending on progress made by then.
He also laid out several conditions, such as the continuation of weekly meetings with creditors and a more detailed breakdown of its advisors fees to be submitted to creditors and the court in two weeks.
Justice Aedit also asked Hyflux to provide the court and creditors with a progress report on its discussions with investors in a month’s time.
Let's block ads! (Why?)
More...