SINGAPORE - The sword finally fell on Hyflux when the High Court ruled on Monday afternoon (Nov 16) that the beleaguered water treatment firm will come under judicial management (JM) with immediate effect following an over-two-year-long debt restructuring attempt.
This means that Hyflux founder Olivia Lum and the rest of the board will no longer be in control of the company as appointed judicial managers Borrelli Walsh has taken over the company’s operations on Monday.
The restructuring firm had been advising a large creditor - the unsecured working group (UWG) of 19 banks that hold more than $931 million of Hyflux debt. Hyflux also owes about $900 million to 34,000 retail investors holding its perpetual and preference shares (PnPs).
Sources told The Straits Times that representatives of Borrelli Walsh are heading to Hyflux premises to take control, change locks and check computer servers.
This is even as Hyflux's lawyers and some creditors support a further short extension of the debt moratorium in view of a plan proposed by American fund manager Strategic Growth Investments (SGI) to acquire and privatise it in a deal that would include a cash injection of $208 million.
Among those supporting a further extension were the medium-term note (MTN) holders that are owed $265 million, creditor DBS and the Securities Investors Association (Singapore) or Sias. Lawyers for all three groups cited concerns that SGI will terminate the deal should Hyflux go into judicial management, mainly because it has said that would likely result in a prolonged process.
But Justice Aedit Abdullah ruled on Monday: "A debtor-in-possession restructuring... must come to an end at some point. A moratorium mechanism is not intended to be continued indefinitely. It is meant to give temporary reprieve... but this has not been the case here.
"I am not persuaded that the current SGI proposal is a basis for further continuation of the moratorium. I must emphasise that the moratorium has been in place for a very long time, and recognise there have been various complications, including the failure of the first deal (with SM Investments), as well as the change of... counsel and the Covid-19 situation.
"I'm not persuaded that sufficient grounds have been made out for any further extension, and this must come to an end at some point. So what may have been sufficient for an extension in the past... may not be sufficient when numerous extensions have been given. It is against that context that I must weigh the application for JM order and I'm satisfied that the statutory objectives... have been made for the appointment of JM," Justice Aedit said.
Despite being given 12 extensions of the debt moratorium over 2½ years, the Hyflux board was no closer to getting a deal that puts money on the table, and some creditors feared the group's remaining value was already being dissipated. Compounding matters, Hyflux and its current and former directors are now under probe for suspected false and misleading statements and breaches of disclosure rules.
Justice Aedit also denied Hyflux's request for a stay of the JM order pending its appeal.
Following his order, Mr Ashok Kumar of BlackOak, who represents the MTN holders, proposed that the court consider the appointment of Mr Yit Chee Wah of FTI Consulting as a joint judicial manager with Borrelli Walsh.
Mr Edward Tiong of Allen & Gledhill, who represents DBS, also proposed the appointment of an "independent and more neutral party that has no close connections to any creditor group".
To that end, he nominated Mr Henry Tan, group CEO and chief innovation officer of Nexia TS, and Mr Chan Yee Hong, Nexia's director of financial advisory, insolvency and restructuring.
Trading of Hyflux shares has been suspended since May 2018 when it filed for bankruptcy protection.
Article From & Read More ( Hyflux put under judicial management, Companies & Markets News & Top Stories - The Straits Times )https://ift.tt/3nusotf
Business
No comments:
Post a Comment