Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Hyflux takes S$916 million impairment hit for first nine months of 2018

The firm submitted its latest statement of financial position to the High Court of the Republic of Singapore on Saturday where the impairment figure was disclosed.

Water treatment firm Hyflux has taken a S$916 million (US$676.76 million) impairment charge for the nine months ended September 30th, 2018, to adjust to the carrying value of the Tuaspring water and power plant and other write-downs.

The firm submitted its latest statement of financial position to the High Court of the Republic of Singapore on Saturday where the impairment figure was disclosed.

This is the first time the embattled firm had revealed any financial numbers since it applied for a moratorium in May to prevent it from being wound up.

The impairment loss ‘relates predominantly to the impairment loss arising from the assessment of the carrying value of Tuaspring and the impairment of receivables for previously completed projects," Hyflux said in the unaudited statement of financial position.

Company to get further valuation

Hyflux is in the process of a court-supervised reorganization, after it had applied to the High Court in May to protect it from creditors while it restructures its debt.

According to a court affidavit filed in June last year, the firm’s chief executive and founder Olivia Lum said the Tuaspring plant had a book value of S$1.3 billion.

While the firm has taken the current valuation in the unaudited financials, it intends to get another valuation from another valuer as the current valuation is ‘significantly lower’ than in 2016.

‘As the carrying value is a reflection of the current depressed market, in the event that the Singapore power market recovers to provide generation companies with sufficient spark spread margins, the valuation might then be revised,’ Hyflux said.

The firm's Tuaspring plant posted a net loss of S$81.9 million for the full year ended December 31st, 2017, and has been contributing to the group’s losses since 2001. As of April 30, 2018, the plant’s total liabilities snowballed to S$537 million.

Working out its restructuring plans

In October last year, Hyflux said Indonesia’s Salim Group and Medco Group (forming a consortium called SM Investments) agreed to inject a S$400 million equity investment in exchange for a 60% stake in the water treatment company to help finance its restructuring and debt problems. The deal also includes two separate loans: a shareholder’s loan of S$130 million and a debtor-in-possession loan of S$30 million.

Last month, the group received the green light from Singapore’s High Court to hold scheme meetings in April for creditors to vote on its restructuring plan.

The group will be conducting a town hall meeting with retail stakeholders on March 13th to discuss about its restructuring scheme.

Hyflux needs to get an agreement from the majority of its creditors and another court approval by mid-April before the S$530 million lifeline from SM Investments expires.

Hyflux's shares remain suspended on the Singapore Exchange.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.