Hyflux burdened by $916m impairment loss from Tuaspring and other assets

It intends to commission a valuation of its assets to finalise its full-year 2018 results.

Hyflux dealt with a $916m impairment loss no thanks to the assessment of the carrying value of Tuaspring and the impairment of receivables for previously completed projects.

According to the firm’s financial statement as at 30 September 2018, Tuaspring is part of Hyflux’s assets and liabilities that are “held for sale.”

The periodic assessment of the carrying value of assets has been carried out. Whilst no value was mentioned, Hyflux said it intends to commission a further valuation to be undertaken by a different valuer for the purposes of finalising the 2018 full year financial results.

Also read: Hyflux's Tuaspring deal gets fifth extension

This valuation is based on the most recent market study conducted by K4K Training & Advisory S.L., the same consultant who did a similar market study in 2016 (which supported the valuation then).

“The view taken in this most recent market study is significantly different from that in 2016 due to the following reasons: (i) the losses in the electricity market in the recent years; and (ii) the projected lower spark spreads for the remaining concession period. The lower projected spark spreads are, in turn, based on (a) a rebasing of starting demand levels; (b) an increase in photovoltaic and autogeneration capacity; (c) revision downwards of the realisable spark spread as a function of the reserve margin; and (d) an assumption of zero retail margin,” Hyflux said.

Hyflux will hold a third round of town hall meetings with retail investors on 13 March to discuss the restructuring.