UPDATE: Singapore PUB to take over Hyflux’s Tuaspring plant in 30 days

Singapore 50 dollar bill

This article was originally published on Wednesday, 17 April 2019 at 15:07 SGT; it has since been updated to add Hyflux’s statement.

Singapore’s water regulator PUB said on Wednesday it issued a notice to Hyflux’s Tuaspring Desalination Plant that it would terminate its water purchase agreement (WPA) and take over the plant.

The termination notice includes a 30-day notice period, PUB said in a statement.

Hyflux said in a filing to SGX on Wednesday confirmed it has received the notice of termination, and pointed to a previous statement from PUB that the water agency would be willing to waive the compensation sum Tuaspring would likely need to pay under the WPA.

“The termination of the WPA is expected to have a material impact on the financial performance of the group,” Hyflux said in the statement.

In March, PUB issued Hyflux’s desalination plant, Tuaspring, a default notice and said it would exercise its right to terminate its WPA and take over the plant if contractual obligations aren’t met. Hyflux said in late March that the default cure period would be extended to 30 April.

But Hyflux had noted in March that the extension would be “immediately rescinded” if the restructuring deal was terminated for any reason.

In early April, Hyflux terminated the deal, saying it had “no confidence” that SM Investments would complete the investment after the Indonesian consortium failed to provide a written commitment it would do so.

SM Investments, which is a consortium of the Salim Group and the Medco Group, entered a binding agreement in October to invest S$530 million for a 60 percent stake in Hyflux, which had filed for court protection in May. Hyflux had said 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.

 

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