SINGAPORE: The Singapore High Court has granted an application by a group of bank creditors to place troubled water treatment firm Hyflux under judicial management.
The judicial management application was filed by an unsecured working group (UWG) of creditors made up of seven banks, namely Mizuho, Bangkok Bank, BNP Paribas, CTBC Bank, KfW, Korea Development Bank and Standard Chartered Bank.
Under judicial management, a court appoints independent managers to run a financially distressed company in place of existing management.
In this case, restructuring firm Borrelli Walsh has been appointed as judicial managers of Hyflux. This means that the company’s current board, including founder-CEO Olivia Lum, will have to step down.
READ: SIAS calls on Hyflux board to step aside after criminal probe brings credibility into question
The decision by High Court Justice Aedit Abdullah comes after a nearly four-hour long hearing on Monday (Nov 16), which started at 10am.
The newly appointed judicial managers will have to be back in court for a case management conference in the week of Dec 14 with an interim report and schedule, the judge ordered, citing concerns about fees and the time needed.
Hyflux applied for a stay on the decision but was denied.
Lawyers representing other stakeholders, such as the medium-term noteholders, DBS and the Securities Investors Association Singapore, voiced objections about the judicial managers appointed, citing the “appearance of conflict of interest” and need for a “neutral and independent party”.
Borrelli Walsh acts as an advisor to the bank creditors who filed for the application to have Hyflux placed on judicial management.
Justice Aedit noted these concerns and said these parties can file their applications for “additional or substitution” judicial managers and will be “heard another day”.
In making his decision for Hyflux to be placed judicial management, Justice Aedit said a court-supervised moratorium, which has been granted to the company for more than two years now, is “not intended to continue indefinitely”. It is only meant to “give temporary reprieve” for companies to work out viable rescue plans, but “this has not been the case here”.
While he recognised various complications such as a change in Hyflux’s legal team and the COVID-19 pandemic, Justice Aedit continued: “I’m not persuaded that sufficient grounds have been made for any further extensions and this must come to an end at some point.”
LONG-RUNNING SAGA
More than two years have passed since Hyflux filed for a court-supervised financial restructuring in May 2018. The long-running debt restructuring of one of Singapore’s most iconic businesses has since been marked by several twists and turns, including U-turns on agreed deals, and remains closely watched by tens of thousands of distressed retail investors.
READ: ‘Uneven’ Hyflux-Utico deal to see huge losses for some retail investors, say experts
The decision by the High Court on Monday came despite Hyflux releasing details of a new rescue offer last Friday, on the cusp of the court hearing this week.
Its latest suitor – American fund manager Strategic Growth Investments (SGI) – has proposed to acquire and privatise the debt-ridden water treatment firm with a S$208 million cash purchase.
Under the proposal, which includes newly issued equity and convertible securities, SGI would pay S$155 million to some creditors, including S$41.3 million to perpetual securities and preference shareholders. In addition, it would place S$53 million in an account under Hyflux’s control for “contingent claimants” and provide S$60 million as working capital.
Hyflux, in a filing to the Singapore Exchange on Friday, said it supports SGI’s “comprehensive” proposal.
But this may now be up in the air as SGI has said it will not continue with the transaction if Hyflux enters into judicial management, given how that process will “likely result in a prolonged timeline”.
The company has other suitors, including Middle Eastern utility firm Utico with whom it signed a S$400 million deal in November last year. The deal has since lapsed.
Other potential investors that have come knocking include Aqua Munda that offered in December last year to purchase debt of Hyflux noteholders and unsecured creditors, and Pison Investments which said in July it would offer S$200 million for Hyflux’s debts via a “reverse Dutch auction”.
CNA has contacted Hyflux on whether it intends to appeal against the judicial management order.
Article From & Read More ( High Court grants bank creditors' application to place Hyflux under judicial management - CNA )https://ift.tt/3ff2irv
Business
No comments:
Post a Comment