SINGAPORE (May 28): Hyflux’s court application for protection while it sorts itself out could be more a result of having overextended itself, rather than just bad conditions. On May 22, in a move that was not entirely unexpected, the water company announced it was seeking a court-supervised process to reorganise its debt and businesses. The court application affords Hyflux protection against any claims from its creditors as it tries to meet debt obligations by selling assets.

There are two major ongoing joint-venture projects that Hyflux wants to complete by husbanding its remaining financial resources under court protection. The first is the US$250 million ($336.2 million) Qurayyat Independent Water Project in Oman that it was awarded in December 2014. Hyflux is also seeking to apply for further protection for a six-month period to May 2019, so that it can complete the $750 million TuasOne Waste-to-Energy Plant in Singapore.

Under the terms of the application, any sums due to creditors after May 22 will not be paid. This includes $15 million in coupon payments to the perpetual security holders due on May 28. It also includes revolving facilities and project financing from banks and financial institutions that are not related to Qurayyat IWP and TuasOne WTE. The only suppliers that will be paid will be those critical to the Qurayyat IWP and TuasOne WTE.

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