This article was originally published on Thursday, 4 April 2019 at 13:33 SGT; it has since been updated to include more details.
Troubled Singapore water infrastrucure player Hyflux said on Thursday that the proposed white knight investment from Indonesian consortium SM Investments has been terminated.
“The company has attempted on multiple occasions to meaningfully engage with the investor on its assertions on the restructuring agreement,” Hyflux said in a filing to SGX midday Thursday.
All of the meetings with Hyflux stakeholders, which had been set for 5 and 8 April, and the planned extraordinary general meeting (EGM), which had been set for 15 April, have been canceled.
“In light of the investor’s responses and conduct, the company has no confidence that the investor is prepared to continue to complete the proposed SMI investment,” even if all conditions are fulfilled, it added.
Hyflux said on Thursday that it had sought a “final, clear and unequivocal written confirmation” that SM Investments would proceed with the deal, and that “regrettably,” the investor declined to do so.
”In the circumstances, the investor has repudiated the restructuring agreement and the company has accepted the investor’s repudiation,” Hyflux said.
Looking ahead, Hyflux said it would “continue to relentlessly pursue all other viable strategic opportunities.”
It also added that Singapore water regulator PUB’s recent announcement that it might take over the money-losing Tuaspring desalination plant without seeking compensation — which may have been a stumbling block with SM Investments — could open the door to other potential investors which were less keen on the asset.
The deal’s termination followed a tense exchange in local media last week between Hyflux and SM Investments over whether the Singapore company had withheld material information.
SM Investments had claimed that the new material information suggests Hyflux’s working capital requirements would be significantly higher that it expected; in addition, the investor said it disagreed with Hyflux’s plan to allocate the investment, and had said it planned to review the allocation, which would have affected the amount used to settle with creditors.
“The company did not withhold material information from the investor. Information had been provided promptly as and when requested by the investor,” Hyflux said in a filing to SGX on Saturday. “The company was surprised by this sudden position taken by the investor.”
In October, consortium SM Investments, which is a consortium of the Salim Group and the Medco Group, entered a binding agreement to invest S$530 million for a 60 percent stake in Hyflux, which had filed for court protection in May, saying the oversupply of gas in Singapore’s market had resulted in depressed electricity prices, which hit earnings in 2017 and drove losses in the first quarter of 2018.
In addition, the company said in May that its plan to divest the Tuaspring project in Singapore and the Tianjin Dagang plant in China had taken longer than expected.