Hyflux Cancels Deal with Would-Be Savior SMI

Water company Hyflux has recently announced that any talks of the investment deal with Indonesian company SM Investment (SMI) have now been terminated, says The Strait Times. In fact, meetings between the two companies scheduled today and on Monday have been cancelled. Moreover, Hyflux announced that shareholders are not required to come to the extraordinary general meeting to be held on April 15.

Hyflux’s water treatment technology is majorly responsible for the supply of water in Singapore. However, it seems that it is in need of additional capital as it is now debt-ridden and was banking on the Indonesian company for investments.

According to Hyflux, the announcement was made as it was not confident that the investor will push through with the deal even after the water company has fulfilled every outstanding condition mentioned in the restructuring agreement. Additionally, it mentioned that SMI has rejected the restructuring agreement.

Meanwhile, the investor has released a statement saying that it was ‘surprised’ by Hyflux’s decision. The statement also revealed that SMI has been awaiting Hyflux’s disclosure of ‘material information.’ This deferral has resulted in the investor’s inability to assess pertinent details and work on an allocation scheme in terms of capitals.

The deal between the two firms has been uncertain since the end of March due to Hyflux’s failure to provide the details requested by SM Investment. In a statement, it also says that without this information, the investor could fail to properly estimate the amount of money it would have to release in order to save the debt-ridden water company.

In its defence, Hyflux insists that SMI already settled with a $271 million investment to aid in the water firm’s repayment of debts. In the meantime, SMI is getting legal advice pertinent to Hyflux’s decision, while Hyflux requests time and space from stakeholders.