SINGAPORE — The Public Utilities Board (PUB) has issued a notice to troubled water treatment company Hyflux’s subsidiary Tuaspring to take over its desalination plant and terminate their water purchase agreement.
It added in a media statement on Wednesday (17 April) that the termination notice provides a 30-day notice period before it takes over the plant.
The desalination plant – built at a cost of $1.1 billion – is at the heart of Hyflux’s mounting financial problems, with debts of nearly $3 billion as of March 2018.
Tuaspring failed to produce financial evidence
Under the water purchase agreement signed with PUB in 2011, Tuaspring has to deliver up to 70 million gallons of desalinated water per day to PUB for a 25-year period from 2013 to 2038.
However, since 2017, it has had difficulties fulfilling its obligations under the water purchase agreement. More recently, it failed to produce financial evidence to demonstrate its ability to keep the plant running for the next six months.
PUB had said last month that it is willing to waive the compensation sum it is entitled to under the agreement, and purchase the desalination plant at zero dollars.
Protest by shareholders at Speakers’ Corner
About 34,000 Hyflux perpetual securities and preference shareholders are owed a total of $900 million, and a group of them staged a protest at Hong Lim Park’s Speakers’ Corner on 30 March against Hyflux’s restructuring plans and recent developments.
Meanwhile, Reuters reported on Tuesday that the Monetary Authority of Singapore, the Accounting and Corporate Regulatory Authority and the Singapore Exchange Regulation are “reviewing Hyflux-related disclosure issues, as well as compliance with accounting and auditing standards to determine if there had been any breaches of listing rules and/or relevant laws and regulations”.
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