Hyflux's SGX filing reveals deal with white knight is on shaky ground

The tangled affairs of beleaguered water treatment firm Hyflux have become even more fraught with conflicts flaring with the white knight investor that holds the company's survival in its hands.This filing was intended to answer questions posed by the investor watchdog on Monday and to assuage growing concerns by investors that the $530 million rescue deal will proceed.

SM Investments had noted on three occasions that it fears the sum used to pay off creditors will not leave enough capital for day-to-day operations. It also said it had not agreed to this aspect of the plan.Hyflux said"certain disagreements have recently emerged" with... Indonesian consortium SM Investments - with which it"has been unable to meaningfully engage"...

This was spurred by national water agency PUB's announcement that it will take over the Tuaspring Desalination Plant if Hyflux subsidiary Tuaspring Private Limited cannot rectify defaults by April 5. Another point of contention involves several disagreements over a desalination plant in Algeria, whose water buyers have indicated their right to scrap a purchase agreement due to defaults at the facility.

"SM Investments has written to Hyflux, asserting that it will continue to comply with its obligations under the restructuring agreement and expects Hyflux to do the same," the company told The Straits Times."Hyflux will hold SM Investments to its word."

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