Singapore’s national water agency PUB said it will take over Hyflux’s Tuaspring Desalination Plant, effective Saturday, after it terminated the water purchase agreement (WPA) with Tuaspring Pte.
In mid-April, PUB had issued a termination notice, which included a 30-day notice period, to Tuaspring Desalination Plant for the WPA termination and plant takeover. PUB had previously said it 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 a statement in mid-April.
In March, PUB had issued Tuaspring a default notice, saying it would exercise its right to terminate its WPA and take over the plant if contractual obligations weren’t met.
Hyflux said in late March that the default cure period would be extended to 30 April, but the extension would be “immediately rescinded” if the troubled water infrastructure company’s restructuring deal was terminated for any reason.
In early April, Hyflux terminated the deal, saying it had “no confidence” that its one-time white knight investor SM Investments would complete the planned 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, had 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 2018. 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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