Clash over $2.7 bil of debt at Hyflux heats up

SINGAPORE (Feb 27): Singapore’s troubled water treatment company Hyflux, formerly celebrated as a hallmark of entrepreneurship in better times, is set for a humbling week.

Creditors are due to file proof by Friday of the obligations that Hyflux owes them, putting the company’s $2.7 billion unsecured debt load under an even brighter spotlight. The firm this month unveiled a proposal to impose 75 to 90% haircuts on unsecured creditors, following a tumble triggered by an ill-timed expansion into energy in recent years.

Singapore’s debt market has inflicted deep losses on unsecured creditors since the oil-market slump in late 2013, as a myriad of companies followed shipbuilders and charterers into distress. Some Hyflux investors have banked on government help, given that the company owns the Tuaspring desalination plant deemed crucial to Singapore’s water supply. But those bets may be misplaced, some observers argue.

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