SINGAPORE (THE BUSINESS TIMES) – Hyflux’s wholly-owned subsidiary is disputing the legitimacy of the contract termination by Tahlyat Myah Magtaa (TMM), the project owner of Hyflux’s Magtaa seawater desalination plant in Algeria.
The subsidiary, Hyflux Operation & Maintenance Algeria (HOMA), on April 20 received a notice which allegedly terminates the operations and maintenance (O&M) contract for the Magtaa desalination plant.
HOMA is seeking to engage with TMM to resolve the matter, Hyflux’s judicial managers from Borrelli Walsh said in a regulatory update on Wednesday.
“HOMA does not agree with or accept the allegations made in the said notice and is reserving all its rights,” the judicial managers said. It added that it is working with HOMA to attempt to resolve the issue amicably with TMM.
Last June, Hyflux received a notice of termination from TMM for the O&M contract. The notice said HOMA had 40 days to cure certain purported events of default under the O&M contract, failing which TMM would terminate the contract.
HOMA said at the time that it does not agree with or accept the allegations made in the notice and will seek advice on enforcement and protection of its rights in the project. It also said it had a 47 per cent shareholding interest in TMM.
Later in July 2020, Hyflux said the effects of TMM’s June 2020 notice to terminate the O&M contract were being suspended in view of “continuing discussions” between the two parties. This meant that no impact is expected on the troubled water treatment company’s financial performance for fiscal 2020.
Trading in Hyflux securities has been suspended since May 2018.