SINGAPORE (Oct 22): Singapore’s government-linked companies came, took a look and hesitated. Hyflux, which needed help from creditors, remained mired in debt. Then came two Indonesian white knights, offering a $530 million rescue package. If the deal goes through, Olivia Lum, founder and executive chairman of the water treatment company, will lose majority control. But, the company she built will survive and remain whole.

On Oct 18, a consortium called SM Investments — formed by Indonesian tycoons Anthoni Salim and Arifin Panigoro — announced their intention to invest $530 million for a 60% stake in Hyflux. The cash infusion would mean Hyflux can exit the court-supervised process of restructuring its liabilities. It would also mean that Hyflux will not need to sell its assets to pare debt.

At a hastily called press conference on the evening of Oct 18, Lum pointed out that this is a direct investment into Hyflux to help the company complete its restructuring process. It is not a piecemeal sale of assets so that Hyflux can raise cash to pacify creditors. The two Indonesian conglomerates — Salim’s Salim Group and Panigoro’s Medco Group, with existing interests in utilities — will also be complementary partners for Hyflux.

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