Hyflux says offtake agreement with Algerian desalination plant purportedly terminated
SINGAPORE (Nov 21): Hyflux says buyers of its 200,000 cubic metres/day seawater desalination plant at Souk Tleta in Tlemcen, Algeria, has purportedly issued a notice of termination for the existing water purchase agreement.
In a Tuesday filing, the water-treatment and power company says Almiyah Attilemcania SpA (AAS), the company responsible for the development of the project, and 30% owned Tlemcen Desalination Investment Company SAS (TDIC) and the 51% shareholder in AAS, had separately received the notice of termination.
The Souk Tleta plant supplies water to Algérienne des Eaux, the state-owned national water company of Algeria, and Sonatrach, the national oil company. Operation and maintenance of the project is performed by a subsidiary of the group, Hyflux-TJSB Algeria SpA.
Hyflux says it does not agree with or accept the allegations made by the buyers in the termination notice and will seek advice on enforcement and protection of its rights in the project.
The group’s carrying amount of investment in AAS had been fully provided for in year 2017 and the purported termination is not expected to have any material impact on the group’s financial performance for the year ended Dec.
On Monday, Hyflux announced it had sold its 50% stake in a firm that sells bottled drinking water in Indonesia for $32 million. The sale price reflects a loss of $300,000 against the net asset value of Hyflux's shareholding in the bottled drinking water firm.
Hyflux liquidates Indonesian asset for $32 mil in race to restructure debt
The sales proceeds of mainly $13.9 million will be used to repay inter-company payments due to a wholly owned subsidiary of Hyflux, and then to Hyflux itself.
Saddled with some $2.95 billion debt, Hyflux last month managed to secure white-knight investors SM Investments, a consortium formed by Indonesia’s Salim Group and Medco Group, will invest $530 million in the company under a scheme of arrangement.
SM Investments will acquire an enlarged 60% stake in Hyflux for $400 million, while granting it a shareholder’s loan of $130 million.
Hyflux gets $530 mil lifeline from Indonesia's Salim and Medco groups
For the period before the completion of the investment, SM Investments will grant Hyflux a $30 million loan for the interim working capital requirement of the company.
The deal is subject to the approval of creditors, as well as national water agency PUB and other authorities.
