Hyflux hit with demand from Maybank for payment of S$509m; VP for operations leaves
Published on by Water Network Research, Official research team of The Water Network in Business
Hyflux, the operator of Singapore's biggest desalination plant, teeters on the brink of liquidation.
The Singapore government announced last week that it will have to seize control of Singapore's largest desalination plant on May 17 in order to secure the country's water supply.
Hyflux said late on Thursday night that subsidiary Tuaspring has received a letter of demand from Maybank dated April 23 over payments the bank said was "immediately due and payable".
ST PHOTO: TIMOTHY DAVID
HYFLUX said late on Thursday night that subsidiary Tuaspring has received a letter of demand from Maybank dated April 23 over payments the bank said was "immediately due and payable".
They comprise S$509.1 million drawn down under term loan facilities, a US$44.5 million cash cover for contingent liabilities, along with further interest and legal costs on a full indemnity basis, the beleaguered water treatment firm said in a regulatory filing.
Hyflux said that the term loan and letter of credit facilities provided by Maybank, its biggest secured creditor, under Tuaspring’s financing arrangements are “non-recourse to and not guaranteed by the company”.
An estimate of S$28.0 million in payments is also due to Maybank from hedging agreements. Hyflux added that it is currently unable to precisely determine the exact amount due to currency exchange fluctuations and interest rate movements.
Maybank had reserved its rights under the hedging agreements entered as part of Tuaspring’s financing arrangements, it said.
"The demand from Maybank, like the termination of the collaboration agreement, is expected to have a material impact on the financial performance of the group," Hyflux said.
Maybank has also issued a notice telling Tuaspring not to sell, remove, transfer or dispose its property charged to a debenture, as the floating charge over said property has crystallised.
This excludes the sale of Tuaspring’s desalination plant and shared infrastructure to the Public Utilities Board as per the water purchase agreement.
On Friday in a separate announcement, Hyflux announced the departure of Chang Cheow Teck, its group executive vice president of operations, "to pursue personal interests".
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Taxonomy
- Desalination
- Sustainable Desalination