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Thursday, May 24, 2018

Maybank down on concern over exposure in Singapore's Hyflux

Billy Toh / theedgemarkets.com
May 24, 2018 16:28 pm +08

KUALA LUMPUR (May 24): Malayan Banking Bhd (Maybank)'s share price fell by 4.7% or 50 sen to RM10.18 at the time of writing with more than 68.2 million shares traded, on concern over the bank's exposure in Singapore's Hyflux Ltd, which is seeking court protection to reorganise its business and address its debt pile.

Earlier, Maybank has fallen by 7.6% to its intraday low of RM9.87. It is one of the most active counters on the Malaysian stock exchange today.

Maybank Singapore and Maybank Kim Eng were the lead arrangers, sole underwriters and bookrunners for Tuaspring Pte Ltd, for an 18-year term loan facility of about S$720 million (RM2.14 billion), to fund the desalination and power plants.

Tuaspring, which is the first integrated water and power project in Asia, has been affected by the impact of the depressed electricity prices in Singapore, according to Hyflux's executive chairman and group CEO Olivia Lum in her letter to shareholders on May 22, and has contributed to the first full year of operating losses in 2017.

In her letter, she said that by taking a step back to "assess holistically how to reorganise the liabilities", the group stands to protect the viability of its core businesses and position itself for long-term sustainable growth.

Hyflux and five of its subsidiaries, Hydrochem (S), Hyflux Engineering, Hyflux Membrane Manufacturing (S), Hyflux Innovation Centre and Tuaspring, filed the court application on Tuesday and have appointed WongPartnership as its legal adviser and Ernst & Young Solutions as its financial adviser.

With the decline, Maybank saw about RM5.47 billion wiped off the market in today's trade so far, leaving it a market capitalisation of RM111.3 billion.

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