SM Investments not endorsing Hyflux’s current rescue deal
The investor said on Thursday the ‘allocation set out in the schemes of arrangement proposed by Hyflux is not agreed. Therefore, the schemes do not satisfy the conditions of the restructuring agreement.’
Salim-Medco (SM) Investments has stated that it does not endorse on the current rescue deal that Hyflux plans to put to a creditors’ vote in the upcoming scheme meeting on April 5.
The Indonesian investor group that offered a S$530 million lifeline in exchange for a 60% stake in Hyflux once all its debts are cleared said on Thursday the ‘allocation set out in the schemes of arrangement proposed by Hyflux is not agreed. Therefore, the schemes do not satisfy the conditions of the restructuring agreement.’
SM Investments stated that it recently became aware of new material information on Hyflux that significantly increases the working capital requirements of the group.
The current allocation from Hyflux has not been agreed upon by the investor, and does not satisfy the conditions of the existing deal, it claimed.
‘In light of the new material information disclosed to SM Investments, it has been reviewing the allocation of the investment for the working capital requirements of the Hyflux group. This will in turn affect the amount available for settlement to creditors.’
Had this material information been disclosed earlier, it would have been taken into consideration in the allocation previously discussed with creditor groups, the investor said.
‘Under the restructuring agreement (signed on October 18 last year), the allocation of the investment between working capital and the amount available for settlement to creditors is to be agreed between Hyflux and SM Investments,’ it added.
Hyflux notes some disagreements with investor, but will proceed on scheme meetings
The statement from SM Investments is in contrast with water treatment firm Hyflux’s comments earlier this week and Hyflux has disputed the reasoning from its white knight investor to excuse itself from the restructuring agreement deal agreed in October.
Hyflux did state that it has several disagreements with the investor, but it stressed that it has the intention to proceed with the scheme meetings scheduled next month.
Hyflux had said that the S$271 million it plans to carve out from SM Investment's potential cash injection to settle its debts with creditors was agreed upon by SM Investments prior to the publication of the schemes on February 16 and called the recent claims from the investor a ‘belated assertion’.
Hyflux added that it has tried but has been unable to meaningfully engage with the investor. It will, pursuant to contractual obligations, use reasonable endeavours to ensure the necessary conditions under the restructuring agreement are satisfied in order for the investment to proceed.
Location change to accommodate a larger attendance for upcoming scheme meeting
To cater to a larger number of attendees, Hyflux will be changing the location for its upcoming scheme meeting on April 5 to The Star Performing Arts Centre, The Star Theatre at 12 noon for banks, noteholders, trade creditors and contingent creditors, and at 7 pm for holders of perpetual capital securities and preference shares.
The attendees will be putting to a vote on the firm’s restructuring plan during the meeting.
The firm has previously reiterated its intention to proceed with the scheme meetings scheduled on April 5 and April 8, as well as the extraordinary general meeting to approve the terms of the investment on April 15.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.