SINGAPORE -- The bailout deal between Singapore's Hyflux and an Indonesian consortium led by Salim Group has fallen through, according to a statement released by Hyflux on Thursday, pushing the embattled water company to the brink.
In separate statements, the two sides offered differing views as to why the deal fell apart.
Hyflux said it "has no confidence that the [consortium] is prepared to continue to complete the proposed investment, even if all outstanding conditions precedent under the restructuring agreement are fulfilled."
The Indonesian group said it was "surprised by the action taken by Hyflux," citing its "purported termination" of the deal.
Under the rescue agreement reached last October, the Indonesian group was to inject a total of 530 million Singapore dollars ($390 million) in exchange for a 60% stake in Hyflux. The money was to be used as working capital and to pay down debt.
But in mid-March the Indonesians hinted they might pull out of the deal. In subsequent meetings the two sides clashed over information disclosure and other issues.
Hyflux has canceled Friday's creditors meeting at which institutional and retail investors were slated to vote on a debt restructuring plan on which the bailout depended. The Singaporean company added in its statement that it had sought "a final, clear and unequivocal written confirmation" from the Indonesian consortium that it would complete the deal.
"Regrettably, [the consortium] has declined to provide such written confirmation that it will proceed to complete the proposed investment," Hyflux said. "The [consortium] has repudiated the restructuring agreement and [we have] accepted the repudiation."
The Salim-led group said that it "has at all times abided by the restructuring agreement, and is taking legal advice in relation to the action taken by Hyflux."
So far, the consortium was Hyflux's only backer. The water company must find another before the April 30 end of the debt moratorium period granted by a court or face liquidation.
"The company will continue to relentlessly pursue all other viable strategic opportunities," Hyflux said in its statement. Citing the fact that the government intends to take over Hyflux's loss-making desalination plant, the company said this "could potentially enable Hyflux to reach out to a wider pool of investors, which may not otherwise have been interested in an investment," the company said.
However, it cautioned: "There can be no assurance that [Hyflux] will be successful in securing a new investor, or in finding a viable alternative to execute the restructuring."