Hyflux subsidiary Tuaspring Pte Ltd has been slapped with a default notice from PUB for failing to keep its desalination plant "reliably operational" as required under the Water Purchase Agreement.HYFLUX subsidiary Tuaspring Pte Ltd has been slapped with a default notice from PUB for failing to keep its desalination plant"reliably operational" as required under the Water Purchase Agreement.
Now that a default notice has been served, Tuaspring has a cure period of 30 days until April 5 or"such longer period as may be reasonable", to consult with PUB on the steps it must take to cure the alleged defaults. If the defaults are not cured in time, PUB has the right to terminate the water contract by giving written notice of not less than 30 days to Tuaspring. PUB can also take control of the plant, once the default notice period expires.
David Gerald, president of Securities Investors Association , said:"PUB's notice to Hyflux has huge implications for the restructuring scheme. The company is currently insolvent and the only way it can comply with the default notice as it stands is to ensure restructuring is successful." Medium-term note holders have been promised a recovery rate of at least 24.5 per cent. Many have voiced their unhappiness with the deal, and called for alternative schemes or liquidation. But with PUB's deadline hanging over Hyflux, it is not likely that there will be enough time to put creditors through a second scheme if the first one fails.
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Source: BusinessTimes - 🏆 15. / 51 Read more »