Hyflux exits contract with SWCC amid company reorganisation
Hyflux has quit a contract with Saudi Arabia's Saline Water Conversion Corporation (SWCC) for three seawater reverse osmosis (SWRO) plants, amid moves to restructure the company.
The contract to design, build, supply, test, and commission SWROs in Duba, Wajh, and Haql, in the west of Saudi Arabia, was terminated with mutual agreement after SWCC requested to change the project to a build, own, transfer (BOT) model. Hyflux, which is poised to begin a reorganisation of its debt, chose not to continue because it would have been required to invest capital into project development. Hyflux received $3.5 million in payment from SWCC for work done.
Hyflux has applied to the High Court of Singapore for moratorium on actions against five of its subsidiaries, to enable it to undertake a court-supervised reorganisation of its liabilities. It has suspended trading of its shares on Singapore Exchange Securities Trading (SGX-ST).
The company said that low electricity prices in Singapore had adversely affected financial performance in 2017, and resulted in short-term liquidity constraints in 2018.
Hyflus is “working with key stakeholders and advisors to pursue a reorganisation process, including ongoing discussions with strategic investors and asset divestments," it said. In a letter to stakeholders, it added: “On the ground, it will continue to be business as usual.”
The five subsidiaries are Hyrdochem, Hyflux Engineering, Hyflux Membrane Manufacturing, Hyflux Innovation Centre, and Tuaspring.
A High Court hearing on the request to restructure is scheduled for 19 June 2018.