Hyflux said on Thursday that a key rescue deal from the Salim-Medco group is officially off, with just weeks to go before the water and power plant company loses court protection from creditors.HYFLUX said on Thursday that a key rescue deal from the Salim-Medco group is officially off, with just weeks to go before the water and power plant company loses court protection from creditors.
Salim-Medco was supposed to invest S$530 million into Hyflux in exchange for a 60 per cent stake once Hyflux's debts had been cleared, an investment that formed a key pillar in Hyflux's restructuring plans. Effectively, Salim-Medco has repudiated the restructuring agreement and Hyflux has accepted its repudiation, the Singapore company said.With Hyflux's court-sanctioned reprieve from creditors set to expire on April 30, the company now finds itself with its back to the wall.
PUB had given TPL until April 30 to cure its defaults, but the termination of the Salim-Medco deal means TPL's deadline will be brought forward to Friday, April 5. Since Hyflux cannot help TPL by Friday, PUB is expected to take over the plant in early May. Hyflux has more than 2,500 employees worldwide. Asked if they would be let go if no white knight emerges by April 30, Hyflux said it would now hold talks with its creditors, and is unable to say more than what has been announced; it said it would give updates through its SGX announcements.