this explanatory statement is important and …€¦ · 15 april 2019 [tentative] scheme effective...

Proposal in relation to a

SCHEME OF ARRANGEMENT

Pursuant to Section 210 of the Companies Act (Chapter 50, 2006 Revised Edition)

Between

HYFLUX LTD

(Incorporated and registered under the laws of the Republic of Singapore with Unique Entity Number 200002722Z)

and

THE SCHEME PARTIES

(as defined in the Scheme)

EXPLANATORY STATEMENT

THIS EXPLANATORY STATEMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. It contains important information and should be read in its entirety. If you are in doubt about any aspect of the proposed Scheme and/or the course of action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately.

Unless otherwise defined herein or the context otherwise requires, capitalised expressions used shall have the meanings set out in Appendix A of this Explanatory Statement.

This Explanatory Statement is addressed and distributed only to Scheme Parties who are persons to whom it may be lawful to distribute it ("relevant persons"). Scheme Parties include persons who hold a Book Entry Interest in the Notes, Perpetual Capital Securities and Preference Shares at the Record Date. This Explanatory Statement is directed only at relevant persons and must not be acted on or relied upon by persons who are not relevant persons.

The last date and time for Scheme Parties to complete and submit a Proof of Claim to the Chairman is 5:00 pm (Singapore Standard Time) on 1 March 2019 (ie, the Record Date). If a Noteholder, Perpetual Capital Secuirites Holder or Preference Shareholder does not file a Proof of Claim, he or she is deemed to have authorised the Company to file a Proof of Claim on his or her behalf based on the holdings reflected in records maintained by the CDP.

If you have recently sold or otherwise transferred your Book Entry Interest in the Notes, Perpetual Capital Securities and/or Preference Shares before the Record Date, you should immediately forward this Explanatory Statement to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee; thereafter, you need not take any further action with respect to this Explanatory Statement. If you have only partially assigned, sold or transferred such interests, or partially assign, sell or otherwise transfer such interests before the Record Date, you should: (i) read this Explanatory Statement carefully; (ii) forward a copy of this Explanatory Statement to the person or persons to whom you have assigned, sold or transferred, or to whom you assign, sell or otherwise transfer, such partial interests; and (iii) take such steps as you consider appropriate following consideration of the matters described in this Explanatory Statement.

A transferee of a Book Entry Interest in the Notes, Perpetual Capital Securities and/or Preference Shares after the Record Date will not be entitled to vote at the Scheme Meeting in respect of such interest. Such transferee will need to make arrangements with the holder of the Notes, Perpetual Capital Securities and/or Preference Shares at the Record Date to ensure that that person votes in accordance with the wishes of the transferee.

Scheme Meetings of each class of the Scheme Parties to consider and, if thought fit, approve the proposed Scheme will be held on 5 April 2019 at Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949, or such other place as may be fixed by the Company and notified to Scheme Parties via SGXNet. The actions that the Scheme Parties should take in relation to the Scheme are set out in Section 4 of this Explanatory Statement. As a Scheme Party, whether or not you intend to be present at the relevant Scheme Meeting, you are requested to complete and return the Proof of Claim enclosed with this Explanatory Statement by the Record Date in accordance with the instructions and notes contained therein. Any previously completed and submitted Proofs of Claim that have been sent to the Company or the Chairman will remain valid unless you have instructed the Chairman in writing to the contrary.

Subject to applicable law and as provided in this Explanatory Statement, the Company may, prior to the calling of any Scheme Meeting, delete, modify, amend or add to the terms of the proposed Scheme which the Company, upon further consultation with the Scheme parties as necessary or relevant, may think fit for the implementation of the Restructuring. Details of any deletion, modification, amendment and/or addition will be announced to all Scheme Parties via SGXNet as soon as reasonably practicable after the relevant decision is made.

This Explanatory Statement or any other document issued with or appended to it (including the proposed Scheme) shall not be construed as, and does not constitute, an offer, invitation or solicitation for the subscription, sale or purchase of securities in any jurisdiction. The Company has not registered and will not register the New Shares under the US Securities Act of 1933, as amended (the “Securities Act”). The New Shares may not be offered or sold in the United States except pursuant to an exemption form, or in a transaction not subject to, the registration requirements of the Securities Act. The New Shares will only be offered and issued and sold outside the United States to holders of the Securities who are persons other than “US persons”, as that term is defined in Rule 902 under the Securities Act, in offshore transactions in reliance upon Regulation S under the Securities Act.

Prior to making a decision on whether to approve the Proposal (as defined herein), you should carefully consider all of the information set forth in this Explanatory Statement. In particular, you should also take note of the risk factors set out in Section 9 of this Explanatory Statement.

Questions and requests for further information and assistance in relation to the proposed Scheme and/or this Explanatory Statement, including in respect of the submission or delivery of Proofs of Claim and/or Proxy Forms, may be directed to Company through the following channels:

Telephone: +65 3517 7999 Email: [email protected]

Post: Hyflux Ltd, Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949

The date of this Explanatory Statement is 22 February 2019.

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TABLE OF CONTENTS

1. Introduction ................................................................................................................................... 5

2. What is a Scheme of Arrangement? ............................................................................................. 6

3. Scheme Parties and Scheme Claims ........................................................................................... 7

4. What are Scheme Parties required to do?.................................................................................. 10

5. Background to the Scheme ........................................................................................................ 12

6. Financial Position of the Group ................................................................................................... 15

7. Salient terms of the Scheme ....................................................................................................... 18

8. Interests of Directors, the Notes Trustee and the Perpetual Capital Securities Trustee. ........... 26

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CONTACTS

The Chairman of the Court Meeting

and Proposed Scheme Managers

Ms Angela Ee c/o Ernst & Young Solutions LLP, or in the alternative,

Mr Glenn Peters c/o Ernst & Young Solutions LLP

Address One Raffles Quay, North Tower, Level 18, Singapore 048583

Email [email protected]

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KEY DATES AND EXPECTED TIMETABLE1

Publication and issuance of notice to lodge Proofs of Claim 1 February 2019

Publication and issuance of notice to convene Scheme Meeting

22 February 2019

Last day to lodge Proofs of Claim2 1 March 2019

Publication of list of Scheme Parties who have filed Proofs of Claim

8 March 2019

Last day to lodge Proxy Forms 72 hours before the relevant Scheme Meeting

Scheme Meetings 5 April 2019

12:00 noon

Scheme Meeting for Unsecured

Scheme Parties

7:00 pm

Scheme Meeting for

Debt Securities Scheme parties

Court hearing to sanction the Scheme (if approved at the Scheme Meetings)

Any day between 8 April 2019 to 15 April 2019 [tentative]3

Scheme Effective Date To be confirmed4

Extraordinary general meeting of shareholders (EGM) Any day between 12 April 2019 to 15 April 2019 [tentative]5

Long-Stop Date in Restructuring Agreement 16 April 20196

End of moratorium ordered in 211B Proceedings 30 April 2019

1 Scheme Parties will be kept advised of any significant change(s) to the above expected timetable via

SGXNet. 2 If a Noteholder, Perpetual Capital Securities Holder or Preference Shareholder does not file a Proof of

Claim, he or she is deemed to have authorised the Company to file a Proof of Claim on his or her behalf based on the holdings reflected in the records maintained by the CDP. The Chairman will admit all amounts in respect of the holdings reflected in the records maintained by the CDP for the purpose of voting at the Scheme Meetings and any distributions made under the Scheme (if sanctioned).

3 This date cannot be finalised at this point as: (i) the Company will only apply to the Court for the sanction of the Scheme after the Scheme is approved at the Scheme Meetings; and (ii) the date of the Court hearing to sanction the Scheme will only be confirmed based on the Court’s schedule after such application has been made. Scheme Parties will be kept advised of the actual date fixed for the Court hearing to sanction the Scheme via SGXNet.

4 The Scheme Effective Date is the date on which the order of Court sanctioning the Scheme is lodged with ACRA. This date cannot be finalised at this point as it depends on the date of the Court hearing to sanction the Scheme.

5 This is the estimated date of the EGM for ordinary shareholders of the Company to approve the issuance of Shares to: (i) the Investor, in consideration of the Investor’s S$400 million investment pursuant to the terms of the Restructuring Agreement; (ii) the Unsecured Scheme Parties, as the Unsecured Claims Equity Consideration under the Scheme; and (iii) the Debt Securities Scheme Parties, as the Debt Securities Claims Consideration under the Scheme.

6 This is the latest date by which all Conditions Precedent under the Scheme must be satisfied.

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Hyflux Ltd

80 Bendemeer Road

Hyflux Innovation Centre

Singapore 339949

(Incorporated and registered under the laws of the Republic of Singapore with Unique Entity

Number 200002722Z)

EXPLANATORY STATEMENT

To: the Scheme Parties

22 February 2019

THIS EXPLANATORY STATEMENT CONCERNS MATTERS WHICH MAY AFFECT YOUR

LEGAL RIGHTS AND ENTITLEMENTS AND YOU MAY THEREFORE WISH TO TAKE

APPROPRIATE LEGAL ADVICE ON ITS CONTENTS

Dear Sir/Madam,

Proposed scheme of arrangement (“Scheme”) in relation to Hyflux Ltd (“Company”) under

Section 210 of the Companies Act (Chapter 50, 2006 Revised Edition) of the Republic of

Singapore (“Act”)

1. INTRODUCTION

1.1. On 22 May 2018, the Company announced that applications have been made to the Court

pursuant to Section 211B(1) of the Act to commence a court supervised process to reorganise

the liabilities and businesses of the Company and four (4) of its subsidiaries, namely,

Hydrochem (S) Pte Ltd (“Hydrochem”), Hyflux Engineering Pte Ltd (“HE”), Hyflux Membrane

Manufacturing (S) Pte Ltd (“HMM”) and Hyflux Innovation Centre Pte. Ltd (“211B

Proceedings”)1.

1.2. Thereafter, the Company conducted a competitive process to pursue strategic investments in

the overall business of the Group as part of the Restructuring. On 18 October 2018, the

Company announced that it had entered into a restructuring agreement2 (“Restructuring

Agreement”) with SM Investments Pte Ltd (“Investor”). Pursuant to which the Investor would,

inter alia:

1.2.1. subscribe for such number of Shares representing 60% of the issued share capital

of the Company for an aggregate subscription amount of S$400,000,000; and

1 More information on the Restructuring can be accessed at: https://www.hyflux.com/financial-

reorganisation-exercise/ 2 A copy of which is set out under Appendix B of this Explanatory Statement.

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1.2.2. grant the Company a loan of a principal amount of S$130,000,000 under a loan

agreement dated 18 October 2018 entered into between the Company and the

Investor3 (“Loan Agreement”).

1.3. A condition precedent to the Restructuring Agreement coming into effect is the full and final

settlement, discharge and/or redemption of the Unsecured Scheme Claims (including the

Notes) and the Debt Securities Scheme Claims (being the Perpetual Capital Securities and

Preference Shares).

1.4. In connection with the Restructuring and as contemplated under the Restructuring Agreement,

the Company intends to enter into a compromise and arrangement with the Scheme Parties

in respect of all Scheme Claims pursuant to the terms of the Scheme.

1.5. For a snapshot of the effect of the Scheme, the payouts thereunder and the expected

returns, please refer to Appendix G of this Explanatory Statement. The purpose of this

Explanatory Statement is to inform the Scheme Parties of the background and effect of the

Scheme. It is written and issued pursuant to Section 211 of the Act and in accordance with

the applicable procedure and guidance laid down in the Act and by the Court. Unless

otherwise defined herein or the context otherwise requires, capitalised expressions used shall

have the meanings set out in Appendix A of this Explanatory Statement.

1.6. Please note that this Explanatory Statement does not form the basis of the legal contract

between the Company and the Scheme Parties. The legally binding contract between the

Company and the Scheme Parties in the event the proposed scheme of arrangement is

approved by the Scheme parties and sanctioned by the Court is the Scheme. The

Company has prepared this Explanatory Statement on a best efforts basis, but make no

warranty as to the accuracy or completeness of the information provided herein. The

Company reserves the right to amend or supplement this Explanatory Statement and/or

the information contained herein.

2. What is a Scheme of Arrangement?

2.1 A scheme of arrangement is a statutory procedure under Singapore law which allows a

company to agree a compromise or arrangement with parties to whom it owes obligations

towards (or classes of parties), and for the terms of that compromise or arrangement to bind

any non-consenting or opposing minority parties.

2.2 A scheme of arrangement becomes becomes effective if:

2.2.1 it is approved by a majority in number (above 50%) representing at least 75% in

value of each class of scheme parties present and voting at each scheme meeting;

2.2.2 it is sanctioned by the Court; and

2.2.3 a sealed copy of the order of Court sanctioning the scheme of arrangement is lodged

with ACRA.

2.3 If the scheme of arrangement becomes effective, it will bind the Company and all the scheme

parties according to its terms, including those scheme parties who did not vote on the scheme

or who voted against it, irrespective of where in the world those scheme parties reside or have

their seat.

3 A copy of which is set out under Appendix C of this Explanatory Statement.

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3. Scheme Parties and Scheme Claims

3.1 The Scheme is intended to bind the Company and the following classes of Scheme Parties in

respect of their Scheme Claims:

3.1.1 the Unsecured Scheme Parties who hold Unsecured Scheme Claims;

3.1.2 the Debt Securities Scheme Parties who hold Debt Securities Scheme Claims; and

3.1.3 the Subordinated Scheme Parties who hold Subordinated Scheme Claims.

3.2 For the avoidance of doubt, the Scheme will not affect any Claim of a Scheme Party that is

an Excluded Claim.

Unsecured Scheme Parties

3.3 The Unsecured Scheme Parties comprise the Contingent Claimants, Facilities Lenders, KfW,

Noteholders and Other Claimants, who hold Contingent Claims, Facilities Claims, the KfW

Claim, Notes Claims and Other Claims, respectively.

3.4 The aggregate outstanding principal amount of all Unsecured Scheme Claims is

approximately S$1.6525 billion.

3.5 The aggregate outstanding principal amount of the Facilities Claims is approximately

S$572.1 million. A breakdown of each Facility Lenders and the approximate value of his or

her respective Facilities Claim(s) is set out as follows:

Facilities Lender Approximate Value of

Facilities Claim (in S$4)

Bangkok Bank Public Co Ltd 115.6 million

Bank of Kaohsiung, Offshore 13.2 million

Bank of Taiwan 15.8 million

BNP Paribas 34 million

Chang Hwa Commercial Bank, Ltd 9.2 million

CTBC Bank Co, Ltd 40.2 million

DBS Bank Ltd 26.3 million

E.SUN Commercial Bank, Ltd 6.6 million

First Commercial Bank, Ltd 19.7 million

Hitachi Capital (HK) Ltd 13.2 million

Hua Nan Commercial Bank, Ltd 19.7 million

Land Bank of Taiwan 19.7 million

Mega International Commercial Bank Co, Ltd 6.6 million

Mizuho Bank, Ltd 133.9 million

PT Bank Rakyat Indonesia (Persero) Tbk 13.2 million

4 All sums denominated in US$ are converted to S$ based on a conversion rate of US$1 = S$1.3221.

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Standard Chartered Bank 41.3 million

The Hongkong and Shanghai Banking Corporation Limited 4.4 million

The Korea Development Bank 39.5 million

Total 572.1 million

3.6 The aggregate outstanding principal amount of the KfW Claim is approximately S$136 million.

3.7 The aggregate outstanding principal amount of the Notes Claims is S$265 million. The

aggregate outstanding principal amounts of the Notes Claims in respect of each of the Series

008 Notes, the Series 009 Notes and the Series 010 Notes are S$100,000,000, S$65,000,000

and S$100,000,000, respectively.

3.8 The aggregate outstanding principal amount of the Contingent Claims is approximately

S$668.1 million. A brief description of each Contingent Claim and the estimated value of such

Contingent Claim is set out as follows:

Contingent Claimant Description of Contingent Claim Estimated Value

(in S$5)

Algerian Energy Company

SpA

Dispute under a joint venture agreement

in respect of the Tlemcen Project6

Algerian Energy Company SpA has filed

a request for arbitration with the

International Chamber of Commerce on

5 February 2019

46.4 million

Malakoff Berhad

Almiyah Attilemçania SpA EPC contract parent guarantee in respect

of the Tlemcen Project

45.6 million

Arab Banking Corporation

BSC

EPC contract and O&M contract

performance bonds in respect of the

Magtaa Project

15.8 million

Guarantees backing local credit facilities

used for the Magtaa Project

39.7 million

BNP Paribas EPC contract performance bond in

respect of the Magtaa Project

74.7 million

DBS Bank Ltd EPC contract performance bond in

respect of the Khurais Project

6.7 million

EPC contract performance bond in

respect of the TuasOne WTE Project

63.6 million

5 All sums denominated in US$ are converted to S$ based on a conversion rate of US$1 = S$1.3221. All

sums denominated in RO (Omani Rial) are converted to S$ based on a conversion rate of 1 RO = S$3.5652. All sums denominated in SAR (Saudi Riyal) are converted to S$ based on a conversation rate of 1 SAR = S$0.3658.

6 For more information, please refer to the paragraphs 36 to 39 of the 6th Affidavit of Lum Ooi Lin dated 11 January 2019 which was filed in the 211B Proceedings and which can be accessed at: https://www.hyflux.com/financial-reorganisation-exercise/info-on-court-process/

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Bank guarantees issued in respect of the

lease of 8 Tuas South Lane, Singapore

637302 (“Tuas Hub”)

2.1 million

Tender bond issued in respect of the

Jurong Bioreactor Plant

3 million

HSBC Institutional Trust

Services (Singapore)

Limited in its capacity as

trustee of Ascendas REIT

Rent guarantee in respect of lease of

Hyflux Building, 202 Kallang Bahru,

Singapore 339339 (“HB”)

3.6 million


Hyflux Innovation Centre, 80 Bendemeer

Road, Singapore 339949 (“HIC”)

38.3 million

Mizuho Bank, Ltd Project delivery guarantee in respect of

the Qurayyat IWP

45.5 million

Project delivery guarantee in respect of

the TuasOne WTE Project

22.5 million

RBC Investor Services

Trust Singapore Limited in

its capacity as trustee of

ESR-REIT


Tuas Hub

39.9 million

Samsung Engineering Co,

Ltd

Salt solution package delivery contract

parent guarantee

39 thousand

Snamprogetti Saudi

Arabia Co Ltd

EPC contract parent guarantee in respect

of the Khurais Project

68.9 million

Standard Chartered Bank EPC contract performance bond in

respect of the Qurayyat IWP

29.7 million

The Hong Kong and

Shanghai Banking

Corporation Limited

EPC contract performance bond in

respect of project(s) in Saudi Arabia

1.6 million

TuasOne Pte Ltd EPC contract parent guarantee in respect

of the TuasOne WTE Project

27 million

Yunnan Water (Hong

Kong) Company Limited

Arbitration concerning disputes under a

sale and purchase agreement dated 26

October 2016 in respect of shares in

Galaxy NewSpring Pte Ltd

Yunnan Water (Hong Kong) Company

Limited has filed a notice of arbitration

with the Singapore International

Arbitration Centre on 23 May 2018

30 million

中国银行股份有限公司

(Bank of China)

Guarantee in respect of the project facility

for the Tianjin Dagang DP

67.1 million

Total 668.1 million

3.9 The aggregate outstanding principal amount of the Other Claims is approximately S$11.3

million. A breakdown of each Other Claimant and the approximate value of his or her

respective Other Claim(s) is set out as follows

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Other Claimant(s) Approximate Value of

Other Claim (in S$7)

8 trade creditors 0.5 million

BNP Paribas El-Djazair – O&M performance bond for the

Tlemcen Project8

3.2 million

DBS Bank Ltd – (1) Bank guarantee called in January 2019

in respect of lease of HIC; and (2) Bank guarantee called in

January 2019 in respect of lease of HB

6.7 million

Oversea-Chinese Banking Corporation, Limited – Bank

guarantee called in January 2019 in respect of lease of HIC

0.9 million

Total 11.3 million

Debt Securities Scheme Parties

3.10 The Debt Securities Scheme Parties comprise the Perpetual Capital Securities Holders and

Preference Shareholders, who hold Perpetual Capital Securities Claims and Preference

Shares Claims, respectively.

3.11 The aggregate outstanding principal amount of all Debt Securities Scheme Claims is

S$900 million.

3.12 The aggregate outstanding principal amount of all Perpetual Capital Securities Claims is

S$500 million.

3.13 The aggregate outstanding principal amount of all Preference Shares Claims is S$400 million.

Subordinated Scheme Parties

3.14 The Subordinated Scheme Parties comprise the Intercompany Claimants and the HS

Claimants, who hold Intercompany Claims and HS Claims, respectively.

3.15 The aggregate outstanding principal amount of all Subordinated Scheme Claims is

approximately S$72.3 million.

4. What are Scheme Parties required to do?

4.1 If you are a Scheme Party, you are entitled to vote at the relevant Scheme Meeting for the

purpose of approving the Scheme in the manner set out in paragraphs 4.2 to 4.4 below. The

Scheme Meetings will be held on 5 April 2019 at Hyflux Innovation Centre, 80 Bendemeer

Road, Singapore 339949, or such other place as may be fixed by the Company and notified

to Scheme Parties via SGXNet.

7 All sums denominated in DZD (Algerian Dinar) are converted to S$ based on a conversion rate of 1 DZD

= S$0.0107. 8 For more information, please refer to the paragraphs 40 to 41 of the 6th Affidavit of Lum Ooi Lin dated

11 January 2019 which was filed in the 211B Proceedings and which can be accessed at: https://www.hyflux.com/financial-reorganisation-exercise/info-on-court-process/

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4.2 A Scheme Party other than a Noteholder, Preference Capital Securities Holder or Preference

Shareholder may attend the relevant Scheme Meeting in person or may vote by proxy.

4.3 In respect of Noteholders, Perpetual Capital Securities Holders and Preference Shareholders:

4.3.1 Only persons who hold a Book Entry Interest in the Notes, Perpetual Capital

Securities or Preference Shares are considered Scheme Parties;

4.3.2 If a person holds Notes, Perpetual Capital Securities or Preference Shares as a

Depositor (ie, he or she is a Noteholder, Perpetual Capital Securities Holder or

Preference Shareholder), he or she may attend the relevant Scheme Meeting in

person or may vote by proxy.

4.3.3 If a person does not hold Notes, Perpetual Capital Securities or Preference Shares

as a Depositor, that person should approach his or her Relevant Intermediary

through whom he or she holds Notes, Perpetual Capital Securities or Preference

Shares in order to be appointed as a proxy by such Relevant Intermediary to attend

and vote at the relevant Scheme Meeting. For the avoidance of doubt, persons who

hold Notes, Perpetual Capital Securities or Preference Shares through a depository

agent or under CPFIS or SRS should consult such depository agent or CPFIS or

SRS agent bank to obtain information on how he or she can be appointed as a proxy

to attend and vote at the Scheme Meeting.

4.4 Please note that the terms of the Scheme prescribe that no assignment, sale or transfer of

any interest in any Scheme Claim after the Record Date shall be recognised by the Company

or the Chairman after the Record Date for the purposes of determining entitlement to attend

and vote at the Scheme Meetings. Persons who hold Scheme Claims against the Company

as at the Record Date shall be the Scheme Parties. A transferee of an interest in a Scheme

Claim after the Record Date will not be entitled to vote at the Scheme Meetings. Such

transferee will need to make arrangements with the transferor to ensure that the transferor

votes in accordance with the wishes of the transferee. Persons who have acquired an interest

in a Scheme Claim after the Record Date should contact the person from whom they acquired

such an interest to ensure distribution of the relevant Scheme Consideration to them or their

nominee pursuant to the terms of the Scheme. The Company and the Chairman accept no

responsibility or liability in respect of such matters whatsoever.

4.5 There is enclosed at Schedule 4 of the Scheme and Appendix D of this Explanatory Statement

the relevant Proof of Claim forms to be submitted by the respective Scheme Parties to the

Chairman in respect of a Scheme Claim.

4.6 If a Scheme Party wishes to vote at the relevant Scheme Meeting, such a Scheme Party must

complete and return the Proof of Claim to the address specified in the relevant Proof of Claim

form by the Record Date (that is, 5:00 pm, 1 March 2019 (Singapore Standard Time)). Please

note that any Scheme Party may be barred from voting at the Scheme Meeting for Unsecured

Scheme Parties if he or she fails to submit his or her Proof of Claim by the Record Date.

4.7 If a Noteholder, Perpetual Capital Securities Holder or Preference Shareholder does not file

a Proof of Claim, he or she is deemed to have authorised the Company to file a Proof of Claim

on his or her behalf based on the holdings reflected in the records maintained by the CDP.

The Chairman will admit all amounts in respect of the holdings reflected in the records

maintained by the CDP for the purpose of voting at the relevant Scheme Meeting and any

distributions made under the Scheme in accordance with its terms (if sanctioned).

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4.8 There is enclosed at Appendix E herein: (i) a Proxy Form for Noteholders; (ii) a Proxy Form

for Perpetual Capital Securities Holders and/or Preference Shareholders; and (iii) a Proxy

Form for Facilities Lenders and KfW; and (iv) a Proxy Form for Contingent Claimants; and (v)

a Proxy Form for Other Claimants. The relevant instructions for completing and submitting

each Proxy Form is set out therein. If a Scheme Party wishes to appoint a proxy or proxies (in

the case of Relevant Intermediaries who are Scheme Parties) to attend the relevant Scheme

Meeting and vote, such Scheme Party must complete and sign the relevant Proxy Form

enclosed in accordance with the instructions contained therein and lodge the Proxy Form with

the Meeting Agent and in any event at least seventy-two hours (72) hours before the time

fixed for the Scheme Meeting (ie, before 12:00 noon, 2 April 2019, for Unsecured Scheme

Parties and before 7:00 pm, 2 April 2019, for Debt Securities Scheme Parties).

4.9 Please note that if a Scheme Party fails to lodge a Proxy Form by the stipulated deadline, the

proxy or proxies of such Scheme Party shall not be entitled to vote at the relevant Scheme

Meeting unless so admitted to vote at the discretion of the Chairman.

5. Background to the Scheme

Background to the Restructuring9

5.1 The oversupply of gas in the Singapore market resulted in depressed electricity prices which

adversely impacted the Group's financial performance since 2016. The impact of the weak

Singapore power market, coupled with an increase in the reserve margin required by the

Energy Market Authority, drove the Group to losses in the first quarter of 2018.

5.2 This was compounded by challenges on the repatriation of monies into Singapore from

projects overseas, as well as increased amount of monies which had to be placed in fixed

deposit accounts as a requirement for performance bonds to be issued or renewed in support

of the existing projects.

5.3 To address these challenges, preserve value and maintain a sustainable capital structure, the

Board took the view that a transparent and court supervised reorganisation process was in

the best interests of all of the Company’s stakeholders and hence applied to the Court to

commence the Restructuring.

Steps taken during the Restructuring10

5.4 As part of the Restructuring, the Group has:

5.4.1 adopted various austerity measures to limit costs and expenses of the Group during

the Restructuring;

5.4.2 conducted a controlled divestment exercise in respect of its interests in the

Tuaspring IWPP, which yielded a single conditional offer at a price below the value

of the secured debt of the project finance lender (“Tuaspring Divestment

Exercise”);

9 More information on the background to the Restructuring can be found at paragraphs 10 to 17 of the 1st

Affdiavit of Lum Ooi Lin dated 15 February 2019 which was filed in the Scheme Proceedings and which can be accessed at: https://www.hyflux.com/financial-reorganisation-exercise/info-on-court-process/

10 More information on the solutions implemented during the Restructuring can be found at paragraphs 20 to 45 of the 1st Affdiavit of Lum Ooi Lin dated 15 February 2019 which was filed in the Scheme Proceedings and which can be accessed at: https://www.hyflux.com/financial-reorganisation-exercise/info-on-court-process/

13

5.4.3 conducted a competitive exercise to pursue strategic investments in the overall

business of the Group (“Investor Search Process”), which culminated in the

execution of the Restructuring Agreement with the Investor as described above at

paragraphs 1.2 and 1.3;

5.4.4 divested its interest in 150,000 shares of PT Oasis Waters International in

consideration of S$32 million as part of the Group’s efforts to streamlines its

business activities, improve liquidity and focus on its core activities in the

infrastructure sector;

5.4.5 executed a definitive binding settlement agreement with the MHI Group (its minority

shareholder in TuasOne Pte Ltd and sub-contractor for the construction of the

TuasOne WTE Project) on 15 February 201911 (“MHI Settlement Agreement”) to

resolve certain disputes between the Group and the MHI Group in respect of the

TuasOne WTE Project, and to pave the way forward for the completion of the

TuasOne WTE Project; and

5.4.6 negotiated with the bank lenders under the TuasOne Facility for the establishment

of a trust account and the resumption of drawdowns under the TuasOne Facility so

as to ensure continued liquidity for the purposes of constructing the TuasOne WTE

Project (such negotiations are still ongoing at present).

Tuaspring Divestment Exercise

5.5 The divest process of the Tuaspring IWPP, which started in January 2017 was resumed as a

collaborative consensual sale process with Malayan Banking Berhad (“Maybank”), the sole

secured lender to Tuaspring Pte Ltd (who holds security over the Tuaspring IWPP). A

competitive bidding exercise was carried out to yield the highest possible market price, and in

turn, increase the recovery for the Group’s stakeholders.

5.6 The Group worked closely with the offtaker (the Public Utilites Board) and other interested

parties to maximise the number of pre-qualified bidders for the Tuaspring IWPP. However,

ultimately, of the two pre-qualified parties, only one proceeded to make a bid and that bid was

subject to conditions which, even if met, would have not meant recovery sufficient to repay

the debt of the sole secured lender, Maybank.

5.7 Following the entry into of the Restructuring Agreement, which is premised upon the Group’s

rentention of its interests in the Tuaspring IWPP, no active efforts to pursue the divestment

are being made. That said, the original agreed upon deadline for entering into a divestment

agreement with the highest bidder for the asset has been extended with Maybank’s approval

on several occasions and is now 28 February 2019. Therefore, the Board remains open to,

and will consider, any offer that is made for the acquisition of the Tuaspring IWPP. To-date, no

offer has been received.

Investor Search Process

5.8 Following the commencement of the 211B Proceedings, the Group undertook an intensive

search process for a strategic investor. This included seeking out potential investors from past

11 More information on the MHI Settlement Agreement can be found from the Company’s announcement

on SGXNet dated 15 February 2019. A copy of the MHI Settlement Agreement is set out under Appendix F of this Explanatory Statement.

14

interest indicated, and engaging in discussions with investors who approached the Group or

its advisors following the Applications.

5.9 In the light of the high profile of the Group and the media attention received by the 211B

Proceedings, there were multiple unsolicited potential investors who approached the Group.

All such options were considered, and the Group also took steps to actively seek out potential

investors who may have had an interest in investing in the Group to seek out the best option

available for stakeholders.

5.10 This search process for a strategic investor yielded 16 potential parties with whom further

rounds of discussions commenced after non-disclosure agreements were entered into. These

further rounds of discussions included provision of an information memorandum outlining the

profile of the Group, including its business and capabilities, financial status, and funding needs

for the potential strategic investors to consider. Parties involved at this stage included

American, European, Mainland Chinese and Southeast Asian parties as well as private equity

funds.

5.11 Following these initial rounds of discussions, further discussions continued with 8 interested

parties. After initial due diligence, the Group considered the various offers presented to the

Group. The offers made ranged from a total investment of S$400 million to S$600 million (with

the equity portion ranging from S$250 million to S$530 million for an equity stake ranging from

approximately 51% to 86.4% of the Company’s shareholding).

5.12 After several discussions with the potential investors, the offers were developed. In particular,

the offer from the Investor was amended to significantly increase the initial equity injection

from the Investor.

5.13 The criteria considered in deciding on accepting the offer from the Investor included:

5.13.1 the value of the investment;

5.13.2 the conditions imposed by the offeror/certainty of the offer;

5.13.3 the financial ability of the offeror to complete the investment;

5.13.4 the timing within which the offeror could complete (bearing in mind the liquidity

crunch); and

5.13.5 the offeror’s synergies with Hyflux which could effectively revitalise the business.

5.14 Based on these criteria, and the circumstances, including the market conditions, the Board

resolved that it was in the best interests of the various stakeholders that the Group enter into

the Restructuring Agreement with the Investor on 18 October 2018.

5.15 In this regard, the Restructuring Agreement and the proposed Scheme, as part of the wider

Restructuring, is intended to serve a dual function:

5.15.1 comprehensively restructure the Group's financial obligations. The Restructuring

allows the Company to comprehensively restructure its obligations with the Scheme

Parties in a way that would significantly reduce the financial burden on the Company

and alleviate pressures faced by the Company on its cash flow; and

5.15.2 enable the Group to reorganise and streamline its operations, focus on areas for

growth and create value for its stakeholders. In this regard, the Company has been

15

pursuing potential strategic investments for the Group. In line with this business

objective, the Restructuring will enable the Company to maximise the value of the

Group for both its creditors and shareholders, and to ensure the long-term

sustainability and competitiveness of the Group with a view to deliver value to its

shareholders and other stakeholders.

6. Financial Position of the Group

6.1 As part of the orders issued by the Court in the 211B Proceedings, the Group has been and

continues to provided updates by regularly filing and publishing monthly management

accounts of the applicants in the 211B Proceedings12.

6.2 The unaudited management accounts of the Company as at 31 December 2018 are set out

below:

Statement of financial position

As at 31 Dec 2018

ASSETS S$’000

Subsidiary companies 278,874

Associates and joint ventures 23,103

Other investment 20,000

Trade and other receivables 868,225

Non-current assets 1,190,202


Cash and cash equivalents 57,879

Current assets 995,934

Total assets 2,186,136

LIABILITIES S$’000

Trade and other payables 127,293

Loans and borrowings 435,227

Tax payable 4,473

Current liabilities 566,993

Net current assets 428,941


Non-current liabilities 411,481

Net assets 1,207,662

Equity S$’000

12 These monthly management accounts are exhibited in the affidavits which can be accessed at:

https://www.hyflux.com/financial-reorganisation-exercise/info-on-court-process/

16

Share Capital 607,258

Treasury Shares (85,929)

Perpetual Capital Securities 494,798

Reserves 36,977

Accumulated profit 154,558

1,207,662

6.3 The unaudited management accounts of Hydrochem as at 31 December 2018 are set out

below:


As at 31 Dec 2018

ASSETS S$’000

Property, plant and equipment 1,534

Intangible assets 15,828

Subsidiaries 45,549

Deferred tax assets 33,271

Trade and other receivables 403

Non-current assets 96,585



Construction contract in progress 386,525

Inventories 1,548


Total assets 726,446








Net assets (86,474)

Equity S$’000

Share Capital 74,000

Reserves (1,255)

Accumulated losses (159,219)

(86,474)

17

6.4 The unaudited management accounts of HMM as at 31 December 2018 are set out below.


As at 31 Dec 2018

ASSETS S$’000

Property, plant and equipment 12,847

Other investment 9,582



Cash and cash equivalents 846

Construction contract in progress 28,989

Inventories 32,309









Net assets (7,232)

Equity S$’000

Share Capital 1,000

Reserves 10,861

Accumulated losses (19,093)

(7,232)

6.5 The unaudited management accounts of HE as at 31 December 2018 are set out below:


As at 31 Dec 2018

ASSETS S$’000

Property, plant and equipment 641

Subsidiaries 36,526



18



Inventories 1,466





Current tax payable 1,277


Net current assets (66,915)

Loans from holding company 4,893

Deferred tax liabilities 53


Net assets 7,597

Equity S$’000

Share Capital -

Capital reserves 378

Accumulated profits 7,219

7,597

6.6 While the Group is currently facing financial difficulties, the Board believes that the Group has

a viable business and may continue business as a going concern if its current financial

obligations and liabilities are restructured and/or compromised and the contemplated

Investment under the Restructuring Agreement is completed.

6.7 The Board believes that the Restructuring pursuant to the terms of the Restructuring

Agreement and the proposed Scheme would benefit all stakeholders, who would receive a

greater return under the Scheme than under a winding up of the Company.

6.8 It is estimated that if the Company is placed into winding up, each Unsecured Scheme Party

would only stand to realise 3.8% to 8.7% of their Scheme Claims. Each Debt Securities

Scheme Party would not receive any recovery at all in a winding up of the Company. A copy

of the liquidation analysis prepared by Ernst & Young Solutions LLP can be found under

Appendix H of this Explanatory Statement.

7. Salient terms of the Scheme

Claims and approval process

7.1 The notice to file the relevant Proof of Claim required under the Act to participate in the

Scheme Meetings and to receive payments under the Scheme was published on 1

19

February 2019. The deadline to file Proofs of Claim is the Record Date (5:00 pm, 1 March

2019).

7.2 If you are a Scheme Party:

7.2.1 You should lodge a Proof of Claim by completing the relevant form provided at

https://www.hyflux.com/financial-reorganisation-exercise/proof-of-claims/ in

accordance with the instructions therein by the Record Date;

7.2.2 Await adjudication of Proofs of Claim by the Chairman of the Scheme Meetings.

The results will be announced by 15 March 2019;

7.2.3 If you wish to, you may request to inspect the Proofs of Claim filed by other

Scheme Parties by 20 March 2019. To do so, you must send such request in

writing to the Chairman and a written notice of the request to the Company and

the affected Scheme Party/Parties.

7.2.3.1 within 3 days of receiving any such request, the party whose Proof

of Claim is sought to be inspected will inform you if he or she objects

to your request;

7.2.3.2 where the party objects, you can send a written notice within 3 days

of receiving the response to: (i) ask for agreement on appointment

of an Independent Assessor to decide on the issue of whether the

Proof of Claim will be allowed to be inspected; or (ii) apply to Court

for the appointment of an Independent Assessor where no such

agreement is arrived at. In such written notice or application, you

must nominate an Independent Assessor and state the dispute that

the Independent Assessor (if appointed) is to decide on;

7.2.3.3 After the Independent Assessor is appointed, the Chairman must

provide the relevant Proof of Claim to him or her as soon as

practicable. The Independent Assessor must, not later than 7 days

after being provided with the relevant proof of claim: (i) make a

decision on the dispute, and (ii) send a written notice of the decision

along with reasons to the Chairman, the Company, and the parties

involved in the dispute.

7.2.4 If you wish to, you may object to the Chairman’s adjudication of your Proof of

Claim or another Scheme Party’s Proof of Claim at a time no later than 22 March

2019.

7.2.4.1 If there is any such objection, you may: (i) write to the Company, the

Chairman and the Scheme Party whose Proof of Claim will be

affected (if applicable) to ask for agreement on appointment of an

Independent Assessor; or (ii) apply to Court for the appointment an

Independent Assessor by the Court under the Act where no such

agreement is arrived at. In such written notice or application, you

must nominate an Independent Assessor and state the dispute that

the Independent Assessor (if appointed) is to decide on.

7.2.4.2 After the appointment of an Independent Assessor, the Chairman

will provide as soon as practicable the relevant Proof of Claim to the

Independent Assessor.

20

7.2.4.3 After the Independent Assessor has been provided the Proof of

Claim, he must, not later than 7 days after the Chairman provides

him the Proof of Claim: (i) make a decision on the dispute, and (ii)

send a written notice of the decision along with reasons to the

Chairman, the Company, and the parties involved in the dispute.

7.2.5 On the day of the Scheme Meetings, the Chairman will provide each Scheme

Party with a copy of the updated list of Scheme Parties with Accepted Scheme

Claims.

7.3 If a Noteholder, Perpetual Capital Securities Holder or Preference Shareholder does not

file a Proof of Claim, he or she is deemed to have authorised the Company to file a Proof

of Claim on his or her behalf based on the holdings reflected in the records maintained by

the CDP. The Chairman will admit all amounts in respect of the holdings reflected in the

records maintained by the CDP for the purpose of voting at the relevant Scheme Meeting

and any distributions made under the Scheme in accordance with its terms (if sanctioned).

Excluded Claims

7.4 For the purposes of the Scheme, the following Claims are Excluded Claims that will not be

affected by the Scheme:

7.4.1 Professional Advisor Fees, which shall be paid by the Company to the Advisors

7 days before the Settlement Date.

7.4.2 The Claims of the Notes Trustee and the Perpetual Capital Securities Trustee for

their fees and related costs and expenses arising under or in respect of the Notes

Trust Deed and Perpetual Capital Securities Trust Deed, respectively.

7.4.3 Any Claim of Tuaspring Pte Ltd, as a compromise of Tuaspring Pte Ltd’s Claims

is prohibited under the present security arrangement with Maybank.

7.4.4 Any Claim arising under or in respect of the MHI Settlement Agreement, as it was

agreed between the Group and the MHI Group that the rights and obligations

thereunder would not be subject to a scheme of arrangement. In particular, MHI’s

claim of S$230,000,000 under the TuasOne EPC Contract is not included in the

Scheme as it will be separately dealt with under the MHI Settlement Agreement.

7.4.5 Any Claim arising under or in respect of the TuasOne Share Charge as the

security thereunder must be maintained for the lenders under the TuasOne

Facility to consider allowing further drawdowns on the TuasOne Facility.

7.4.6 Any Claim arising under or in respect of the matters set out in Schedule 3 of the

Scheme, which are contingent Liabilities arising from bonds and guarantees that

must be maintained if the Group is to continue its O&M business.

Scheme Effectiveness

7.5 The Scheme shall become effective on the date the Court order sanctioning the Scheme

(after it has been approved by the Scheme Parties) is registered with ACRA.

21

7.6 The continued effectiveness of the Scheme is contingent upon Completion under the

Restructuring Agreement. This is in turn contingent upon the satisfaction and waiver of all

Conditions Precedent, including: (i) the approval by the shareholders of the Company and

SGX-ST for the listing and quotation of the new Shares to be issued by the Company to

the Investor and the Scheme Parties that are to receive equity payouts under the Scheme;

and (ii) the Company obtaining the necessary whitewash waiver from the Securities

Industries Council.

7.7 If the investment contemplated under the Restructuring Agreement does not go through

for any reason whatsoever, the Scheme shall be terminated and the compromise and

arrangements thereunder shall be of no effect and shall be construed as if it had never

become effective.

Scheme Payouts

7.8 All cash payouts calculated pursuant to the formulae set out in the Scheme are to be

rounded down to the nearest cent.

7.9 All equity payouts calculated pursuant to the formulae set out in the Scheme are to be

rounded down to the nearest Shares.

7.10 All cash payouts and equity payouts shall be made to a securities account held with CDP.

If a Scheme Party does not have such an account, he or she must provide know-your-

client documents and such other information required to effect cash and equity payouts to

the satisfaction of the Escrow Agent (if the payout is to be made from the Escrow Account)

or the Scheme Manager (in any other case).

7.11 In the case that: (i) a particular equity payout to be made is less than 100 Shares; or (ii)

the Scheme Party cannot receive equity payouts as a result of the prohibitions and

restrictions of the jurisdiction he or she is in, the Scheme Manager and/or the Company

can sell the Shares to be distributed in the market at the prevailing market price and

distribute the proceeds from such sale to the relevant Scheme Party within 28 days from

the date the equity payout was supposed to be due.

7.12 Overview: A table summarising the payouts and returns under the Scheme is set out under

Appendix G of this Explanatory Statement.

7.13 Unsecured Scheme Party Payout: If you are an Unsecured Scheme Party, you shall be

entitled to the following cash and equity distributions in consideration of the full and final

settlement and discharge of all Liabilities arising under or in respect of your Unsecured

Claim(s).

7.13.1 On the Settlement Date, all Accepted Unsecured Claims that are not Contingent

Claims shall receive a pro rata distribution of S$232,000,000 and Shares

constituting 27% of the enlarged issued share capital of the Company in the form

of the Initial Unsecured Claim Cash Payout and the Initial Unsecured Claim

Equity Payout, respectively.

7.13.2 The Initial Unsecured Claim Cash Payout and Initial Unsecured Claim Equity

Payout for all Accepted Contingent Claims shall be set aside in the Escrow

Account.

7.13.3 Upon the Crystallisation of a Contingent Claim, the Accepted Unsecured Scheme

Party shall receive the respective Initial Unsecured Claim Cash Payout and Initial

22

Unsecured Claim Equity Payout from the Escrow Account within 21 days from

the date the Contingent Claim is regarded as a Crystallised Contingent Claim

under the terms of the Scheme.

7.13.4 1 year after the Restructuring Effective Date, the Scheme Manager shall take an

account of all Extinguished Contingent Claims and thereafter, within 28 days

from the date falling 1 year after the Restructuring Effective Date, distribute the

Initial Unsecured Claim Cash Payouts and Initial Unsecured Claim Equity

Payouts initially allocated to the Extinguished Contingent Claims on the

Settlement Date in the following manner:

7.13.4.1 80% of the sum of the Initial Unsecured Claim Cash Payouts initially

allocated to the Extinguished Contingent Claims shall be distributed

in respect of all Accepted Unsecured Claims that are not Contingent

Claims and all Accepted Crystallised Contingent Claims in the form

of the Second Unsecured Claim Cash Payout.


allocated to the Extinguished Contingent Claims shall be distributed

to the Company in the form of the First Contingent Claim

Management Payout. The Board shall exercise its discretion in

distributing the First Contingent Claim Management Payout, and will

consider, among other things, the relevant persons responsible for

the Accepted Contingent Claims that were Extinguished.

7.13.4.3 The entire Initial Unsecured Claim Equity Payouts initially allocated

to the Extinguished Contingent Claims shall be distributed in

respect of all Accepted Unsecured Claims that are not Contingent


of the Second Unsecured Claim Equity Payout.

7.13.5 2 years after the Restructuring Effective Date, the Scheme Manager shall take

an account of all Contingent Claims that Extinguished after the first year as well

as all Expired Contingent Claims. Thereafter, within 52 days from the date falling

2 years after the Restructuring Effective Date, distribute the Initial Unsecured

Claim Cash Payouts and Initial Unsecured Claim Equity Payouts initially

allocated to Contingent Claims that are Extinguished after the first year and

Expired Contingent Claims on the Settlement Date in the following manner:


allocated to Contingent Claims that are Extinguished after the first

year and the entire Initial Unsecured Claim Cash Payouts initially

allocated to the Expired Contingent Claims shall be distributed in

respect of all Accepted Unsecured Claims that are not Contingent


of the Final Unsecured Claim Cash Payout.


allocated to the Contingent Claims that are Extinguished after the

first year shall be distributed to the Company in the form of the

Second Contingent Claim Management Payout. The Board shall

exercise its discretion in distributing the Second Contingent Claim

Management Payout, and will consider, among other things, the

23

relevant persons responsible for the Accepted Contingent Claims

that were Extinguished.

7.13.5.3 The entire Initial Unsecured Claim Equity Payouts initially allocated

to the Contingent Claims that are Extinguished after the first year

and the Expired Contingent Claims shall be distributed in respect of

all Accepted Unsecured Claims that are not Contingent Claims and

all Accepted Crystallised Contingent Claims in the form of the Final

Unsecured Claim Equity Payout.

7.13.5.4 The concept is to empty the Escrow Account by redistributing all

remaining funds (less the Second Contingent Claim Management

Payout) to all other Unsecured Scheme Claims that are not

Extinguished or Expired Contingent Claims.

7.13.5.5 In the event that there are nonetheless undistributed or uncollected

cash payouts or equity payouts on the date falling three months

before the expiry of the Holding Period, the Scheme Manager may

apply to Courty for leave to further distributed the remaining

amounts on a pro rata basis to all Unsecured Scheme Parties that

have previously received a distribution in respect of their Accepted

Unsecured Claims.

7.14 Debt Securities Scheme Parties:

7.14.1 The S$27 million Debt Securities Claims Cash Consideration shall be split as

between the Perpetual Capital Securities Claims and the Preference Shares

Claims in a manner proportionate to their respective aggregate principal amount

(ie, in the ratio of 5:4 as between the Perpetual Capital Securities Claims (S$500

million) and the Preference Shares Claims (S$400 million).

7.14.2 Similarly, the Debt Securities Claims Equity Consideration, being 9% of the

enlarged issued share capital of the Company, shall be split as between the

Perpetual Capital Securities Claims and the Preference Shares Claims in a

manner proportionate to their respective aggregate principal amount (ie, in the

ratio of 5:4 as between the Perpetual Capital Securities Claims (S$500 million)

and the Preference Shares Claims (S$400 million).

7.14.3 On the Settlement Date, the following distributions shall be made:

7.14.3.1 The Perpetual Capital Securities Claims Consideration, being S$15

million, and the Perpetual Capital Securities Claims Equity

Consideration, being 5% of the Shares in enlarged issued share

capital of the Company, shall be distributed between Perpetual

Capital Securities Holders on a pro rata per unit basis.

7.14.3.2 The Preference Shares Claims Consideration, being S$12 million,

and the Preference Shares Claims Equity Consideration, being 4%

of the Shares in enlarged issued share capital of the Company, shall

be distributed between Preference Shareholders on a pro rata per

share basis.

7.14.4 The Board will also separately execute a side letter undertaking to distribute:

24

7.14.4.1 all ordinary shares presently held by the Board, which will represent

1.38% of the enlarged issued share capital of the Company, to the

Perpetual Capital Securities Holders and the Preference

Shareholders on a pro rata basis; and

7.14.4.2 all distributions they receive under the Scheme in respect of their

own holdings of Perpetual Capital Securities and Preference

Shaers, to the Perpetual Capital Securities Holders and the

Preference Shareholders on a pro rata basis.

7.15 Subordinated Scheme Parties shall each receive a nominal S$1 cash distribution on the

Settlement Date.

Crystallisation and Extinguishment of Contingent Claims

7.16 A Data Room shall be established to facilitate information sharing for the purposes of the

Crystallisation and Extinguishment process for Accepted Contingent Claims.

7.17 Crystallised Contingent Claims: Whenever an Unsecured Scheme Party who holds an

Accepted Contingent Claim is of the view that his or her Contingent Claim has become a

legally valid and binding debt of a definite amount then actually due from the Company, he

or she can issue a Contingent Claim Crystallisation Notice to state the reasons for his or

her view:

7.17.1 The Scheme Manager shall upload a Contingent Claim Crystallisation Notice

onto the Data Room that can be accessed by all Unsecured Scheme Parties

within 3 days of receiving a Contingent Claim Crystallisation Notice.

7.17.2 All Unsecured Scheme Parties then have 17 days from the date of the Contingent

Claim Crystallisation Notice to object to the same by filing a Contingent Claim

Crystallisation Challenge with the Scheme Manager. The Scheme Manager shall

also upload any Contingent Claim Crystallisation Challenge received within 3

days of such receipt.

7.17.3 The Scheme Manager shall consider the Contingent Claim Crystallisation Notice

and the Contingent Claim Crystallisation Challenge(s) submitted, If the Scheme

Manager takes the view that the Contingent Claim has become a legally valid

and binding debt of a definite amount then actually due from the Company, he or

she shall issue a Contingent Claim Crystallisation Determination within 21 days

of receiving the Contingent Claim Crystallisation Challenge stating such

determination. The Scheme Manager shall upload his or her Contingent Claim

Crystallisation Determination onto the Data Room within 3 days of its issuance.

7.17.4 The issuance of such a Contingent Claim Crystallisation Determination shall

cause a Contingent Claim to be Crystallised under the terms of the Scheme.

7.17.5 Alternatively, a Contingent Claim may also become Crystallised if a Contingent

Claim Crystallisation Notice is issued but no Contingent Claim Crystallisation

Challenge is submitted within 17 days from such Contingent Claim Crystallisation

Notice and no Contingent Claim Crystallisation Determination is issued within 38

days from such Contingent Claim Crystallisation Notice.

7.18 Extinguished Contingent Claims: The Scheme Manager may, upon consultation with

the Company, issue a Contingent Claim Extinguishment Notice to an Unsecured Scheme

25

Party who holds an Accepted Contingent Claim stating that the Scheme Manager has

determined his or her Accepted Contingent Claim has been extinguished, waive or

compromised or is, for any other reason, no longer a Liability:

7.19 The Scheme Manager shall upload the Contingent Claim Extinguishment Notice

onto the Data Room within 3 days of its issuance.

7.20 The Unsecured Scheme Party that is affected may object to the Contingent Claim

Extinguishment Notice by issuing a Contingent Claim Extinguishment Challenge

within 14 days from his or her receipt of the Contingent Claim Extinguishment

Notice. The Scheme Manager shall upload any Contingent Claim

Extinguishment Challenge received within 3 days of such receipt.

7.21 The Scheme Manager shall consider the Contingent Claim Extinguishment

Challenge and issue a Contingent Claim Extinguishment Determination within

21 days of the Contingent Claim Extinguishment Challenge stating whether or

not the Contingent Claim in question has been extinguished, waive or

compromised or is, for any other reason, no longer a Liability. The Scheme

Manager shall upload his or her Contingent Claim Extinguishment Determination

onto the Data Room within 3 days of its issuance.

7.22 The issuance of a Contingent Claim Extinguishment Determination stating that

the Contingent Claim in question has been extinguished, waive or compromised

or is, for any other reason, no longer a Liability shall cause a Contingent Claim

to be Extinguished under the terms of the Scheme.

7.23 Alternatively, a Contingent Claim may also become Extinguished if a Contingent

Claim Extinguishment Notice is issued but no Contingent Claim Extinguishment

Challenge is submitted within 14 days from such Contingent Claim

Extinguishment Notice.

7.24 Expired Contingent Claims: Expired Contingent Claims are any Contingent Claims that:

(i) have not become Crystallised within 45 days from the Contingent Claim Expiry Date (ie,

2 years after the Restructuring Effective Date); and (ii) have not become Extinguished

within 42 days from the Contingent Claim Expiry Date.

Discharge and Extinguishment of Scheme Claims

7.25 On the Scheme Effective Date, each Scheme Party shall give the undertakings, releases

and waivers as set out in Clause 5 of the proposed Scheme.

7.26 For the avoidance of doubt, the undertakings, releases and waivers set out in Clause 5 do

not apply to Excluded Claims.

Remuneration of Scheme Manager

7.27 The Scheme Manager shall be remunerated according to what is fair, reasonable and

adequate given the Scheme Manager’s roles and responsibilities set out in the scheme

and prevailing market conditions. Based on the structure of the scheme, it is envisaged

that the work to be done can broadly be divided into work that is: (i) complex and requires

considerable expertise or judgment; and (ii) time-intensive but generally less complex.

7.28 The first category (work involving considerable “value contribution”), includes the

adjudication of proofs, conduct of the scheme meetings, attending to queries from Scheme

26

Parties, re-basing and calculation of distributions under the Scheme (other than the initial

distribution that is to be made 28 days after the Completion Date in the Restructuring

Agreement), dealing with surplus amounts, addressing challenges to the Scheme

Manager’s decisions and the assessment of liabilities that crystallise and liabilities that are

extinguished save in obvious situations. All disputes, court proceedings and matters

involving an independent assessor as provided for under the Proof Regulations will be part

of this category.

7.29 This category of work will be remunerated on a time–incurred basis using standard hourly

rates and handled by a team staffed at appropriate levels of seniority.

7.30 The second category of work involves more time spent especially in light of the varied

nature of the obligations being schemed and the large number of Scheme Parties. This

category includes administrative tasks, co-ordination of logistics and reconciling of

documents and verification of data. This category also includes other tasks which do

require more judgment to be exercised in addition to considerable man-hours such as the

preparing of the various lists of creditors and the corresponding amounts that have been

claimed, admitted and/or rejected, the review of supporting documents from Scheme

Parties against the company’s records and following up on further documents and

information required, computation and work associated with the initial distribution 28 days

after the completion date in the Restructuring Agreement, assessment of Accepted

Contingent Claims that expire at the end of the Scheme period, assessment of Accepted

Contingent Claims that have Extinguished during the Scheme period, assessment of

Accepted Contingent Claims that have Crystallised during the Scheme period, computing

the various cash and equity payouts under the Scheme, and the facilitating of requests for

inspection of Proofs of Claim.

7.31 This category of work will similarly be remunerated on a time–incurred basis using

standard hourly rates and handled by a team staffed at appropriate levels of seniority but

a discount will be applied on the total fees incurred.

8. Interests of Directors, the Notes Trustee and the Perpetual Capital Securities Trustee.

8.1 The table below sets out the interests of the Directors of the Company as at 21 January

2018.

Name of Directors Number of

ordinary

shares

Number of Perpetual Capital

Securities

Number of Preference

Shares

Christopher

Murugasu

1,095,468 400,000 1,000

Gary Kee - 500,000 -

Gay Chee Cheong 3,000,000 500,000 -

Lau Wing Tat - 50,000 -

Lee Joo Hai - - -

Olivia Lum 267,351,211 1,000,000 8,020

Simon Tay - 500,000 -

Teo Kiang Kok 375,000 200,000 3,000

8.2 The Company is not aware of any relevant interests of the Notes Trustee and the Perpetual

Capital Securities Trustee.

27

9. Risk Factors

9.1 In considering whether to vote in favour of the Scheme, each Scheme Party should

carefully consider all of the information contained in this Explanatory Statement and in

particular the risk factor described below. There may be other risks other than that

highlighted below, and Scheme Parties should also consider all other risks relevant in the

circumstances.

9.2 Risk of Scheme not being sanctioned by the Singapore Court: Even if the required

majority of votes is secured from Scheme Parties in support of the Scheme (which cannot

be assured) at the Scheme Meetings, the Scheme is still subject to the approval of the

Court.

9.3 Risk of Scheme not being approved by shareholders: Even if the Scheme is

sanctioned by the Court, its effectiveness is nonetheless contingent on: (i) the approval by

the shareholders of the Company and SGX-ST for the listing and quotation of the new

Shares to be issued by the Company to the Investor and the Scheme Parties that are to

receive equity payouts under the Scheme; and (ii) the Company obtaining the necessary

whitewash waiver from the Securities Industries Council (see above at paragraph 7.6).

Appendix A – Definitions

A-1

DEFINITIONS AND INTERPRETATION

In this Explanatory Statement, unless inconsistent with the subject or context, the following

expressions shall have the following meanings:

“211B Proceedings” means the applications for a moratorium under Section 211B(1) of the

Act filed by each of the Company, HE, Hyflux Innovation Centre Pte Ltd, HMM and

Hydrochem, vide HC/OS 633/2018, HC/OS 634/2018, HC/OS 635/2018, HC/OS 636/2018

and HC/OS 638/2018, respectively, and all associated proceedings therein.

“Accepted” means, in relation to a Scheme Claim, the acceptance by the Chairman of such

Claim (or part thereof) for the purposes of determining entitlement to attend and vote at the

Scheme Meetings without dispute or, where applicable, the acceptance or determination by

the Independent Assessor of such Claim (or part thereof) for such purpose in accordance with

the Proof Regulations.

“Account Holder” means a Depositor (which excludes a sub-account holder) who has Notes,

Perpetual Capital Securities, or Preference Shares entered against his or her name in the

Depository Register (as defined in Section 81SF of the SFA) of CDP.

“ACRA” means the Accounting and Corporate Regulatory Authority of Singapore.

“Act” means the Companies Act, Chapter 50 of Singapore.

“Advisor” means any of the professional advisors advising the Group, the Contingent

Claimants, the Facilities Lenders, KfW, the Other Claimants, the Noteholders, the Notes

Trustee, the Perpetual Capital Securities Holders, the Perpetual Capital Securities Trustee

and/or the Preference Shareholders in connection with the Restructuring. For the avoidance

of doubt, Advisors include but are not limited to:

(a) in relation to the Informal Steering Committee (Notes), FTI Consulting (Singapore) Pte

Ltd, Akin Gump Strauss Hauer & Feld, Akin Gump Strauss Hauer & Feld LLP and

BlackOak LLC;

(b) in relation to the Informal Steering Committee (P&P), Pricewaterhouse Coopers

Advisory Services Pte Ltd and Drew & Napier LLC;

(c) in relation to the Unsecured Working Group, Borrelli Walsh Limited, Hogan Lovells Lee

& Lee and Tan Kok Quan Partnership; and

(d) in relation to the Group, Ernst & Young Solutions LLP, Ernst & Young Corporate

Finance Pte Ltd and WongPartnership LLP.

“Affiliates” means, in relation to any person, its current and former direct and indirect

Subsidiaries, subsidiary undertakings, parent companies, holding companies, partners,

equity holders, members and managing members, affiliated partnerships and any of their

respective Affiliates.

“Base Currency Conversion Rate” means the conversion rate of any foreign currency

denomination to dollars (S$) as published in The Business Times on 1 March 2019.

“Board” means the board of directors of the Company.

A-2

“Book Entry Interest” means:

(a) in relation to the Notes, a beneficial interest as principal in a Global Note Certificate;

(b) in relation to the Perpetual Capital Securities, a beneficial interest as principal in the

Global Certificate (as defined in the Perpetual Capital Securities Trust Deed); and

(c) in relation to the Preference Shares, a beneficial interest as principal in the Global

Share Certificates,

in each case held by an Account Holder.

“Business Day” means a day (other than a Saturday, Sunday or public holiday) on which

commercial banks are open for business in Singapore.

“CDP” means The Central Depository (Pte) Limited.

“Chairman” means the chairman of the Scheme Meetings appointed pursuant to Section

211F(5) of the Act.

“Claim” means any Liability of the Company, together with any of the following matters

relating to or arising in respect of such Liability:

(a) any refinancing, novation, deferral or extension;

(b) any claim for breach of guarantee, representation, warranty and/or undertaking or an

event of default or under any indemnity given under or in connection with any document

or agreement evidencing or constituting any other Liability falling within this definition;

(c) any claim for damages or restitution;

and any amounts which would be included in any of the above but for any discharge, non-

provability, unenforceability or non-allowance of those amounts in any insolvency or other

proceedings.

“Company” means Hyflux Ltd, a company incorporated in Singapore with registration number

200002722Z, whose registered office is located at 80 Bendemeer Road, Hyflux Innovation

Centre, Singapore 339949.

“Conditions Precedent” means the Conditions as defined in the Restructuring Agreement

and the Conditions Precedent as defined in the Loan Agreement.

“Constitutional Documents” means the Memorandum and Articles of Association and any

other constituent documents of the Company.

“Contingent Claim” means any Claim is not an Excluded Claim, which, at the time of the

determination of any matter under or in connection with the Scheme, is a contingent Liability

of the Company which may or may not arise in the future, but in respect of which, as at such

time, is not then a legally valid and binding debt of a definite amount then actually due from

the Company. A Contingent Claim shall include any Claim arising under or in respect of the

matters set out in Schedule 2 as supplemented, amended and restated from time to time.

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“Contingent Claim Crystallisation Challenge” means a written response to a Contingent

Claim Crystallisation Notice to be issued by any Unsecured Scheme Party (excluding any

Unsecured Scheme Party who as at the date of that Contingent Claim Crystallisation Notice

only has a Contingent Claim which has been Extinguished) to the Scheme Manager within

seventeen (17) days of the date of the Contingent Claim Crystallisation Notice setting out the

following information:

(a) proof that his or her Unsecured Claim was Accepted; and

(b) objection(s) to the contents of the subject Contingent Claim Crystallisation Notice, in

particular, the reasons as to why the respective Contingent Claim should not be

regarded as a legally valid and binding debt of a definite amount then actually due from

the Company; and

(c) any evidence or documents in support of (b) above.

The Scheme Manager shall upload each Contingent Claim Crystallisation Challenge into the

Data Room within three (3) days of his or her receipt of such Contingent Claim Crystallisation

Challenge. For the avoidance of doubt, each Unsecured Scheme Party can only submit one

(1) Contingent Claim Crystallisation Challenge in response to a Contingent Claim

Crystallisation Notice.

“Contingent Claim Crystallisation Determination” means a written determination to be

issued by the Scheme Manager to a Contingent Claimant within thirty eight (38) days of

receiving a Contingent Claim Crystallisation Notice from that Contingent Claimant stating that

the Accepted Contingent Claim referred to in the Contingent Claim Crystallisation Notice has

been determined by the Scheme Manager to have become a legally valid and binding debt of

a definite amount then actually due from the Company. In arriving at his or her determination,

the Scheme Manager shall review the contents of the Contingent Claim Crystallisation Notice

as well as any Contingent Claim Crystallisation Challenge(s) submitted.

The Scheme Manager shall upload each Contingent Claim Crystallisation Determination into

the Data Room within three (3) days of his or her issuance of such Contingent Claim

Crystallisation Determination.

“Contingent Claim Crystallisation Notice” means a written notice to be issued by a

Contingent Claimant to the Scheme Manager by no later than seven (7) days after the

Contingent Claim Expiry Date setting out the following information:

(a) proof that his or her Contingent Claim was Accepted;

(b) the basis for the Accepted Contingent Claim becoming a legally valid and binding debt

of a definite amount then actually due from the Company on a date no later than the

Contingent Claim Expiry Date; and

(c) any evidence or documents in support of (b) above.

The Scheme Manager shall upload each Contingent Claim Crystallisation Notice into the Data

Room within three (3) days of his or her receipt of such Contingent Claim Crystallisation

Notice.

“Contingent Claim Expiry Date” means the date falling two (2) years after the Restructuring

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Effective Date.

“Contingent Claim Extinguishment Challenge” means a written notice to be issued by the

subject Contingent Claimant to the Scheme Manager within fourteen (14) days from the

Contingent Claimant’s receipt of a Contingent Claim Extinguishment Notice indicating the

Contingent Claimant’s objection to the Scheme Manager’s determination under the

Contingent Claim Extinguishment Notice and setting out the reasons for such objection

(including any supporting evidence or documents).

The Scheme Manager shall upload each Contingent Claim Extinguishment Challenge into the

Data Room within three (3) days of his or her receipt of such Contingent Claim Extinguishment

Challenge.

“Contingent Claim Extinguishment Determination” means a written determination to be

issued by the Scheme Manager to a Contingent Claimant within twenty one (21) days of

receiving a Contingent Claim Extinguishment Challenge from that Contingent Claimant stating

whether the objections raised therein have been accepted by the Scheme Manager or

whether the Scheme Manager has nonetheless determined that the subject Accepted

Contingent Claim is no longer a Liability.

The Scheme Manager shall upload each Contingent Claim Extinguishment Determination into

the Data Room within three (3) days of his or her issuance of such Contingent Claim

Extinguishment Determination.

“Contingent Claim Extinguishment Notice” means a written notice to be issued by the

Scheme Manager to a Contingent Claimant by no later than seven (7) days after the

Contingent Claim Expiry Date notifying the Contingent Claimant that his or her respective

Accepted Contingent Claim has been, as determined by the Scheme Manager, extinguished,

waived or compromised or is, for any other reason, no longer a Liability on a date no later

than the Contingent Claim Expiry Date.

The Scheme Manager shall upload each Contingent Claim Extinguishment Notice into the

Data Room within three (3) days of his or her issuance of such Contingent Claim

Extinguishment Notice.

“Contingent Claimant” means any person that holds a Contingent Claim.

“Court” means the High Court of Singapore.

“CPFIS” means the investment scheme introduced pursuant to Central Provident Fund

(Investment Schemes) Regulations, Cap. 36, Rg 9 of Singapore.

“Crystallised” means, in respect of an Accepted Contingent Claim:

(a) the issuance of a Contingent Claim Crystallisation Determination under which the

subject Accepted Contingent Claim is determined by the Scheme Manager to be a

legally valid and binding debt of a definite amount then actually due from the Company;

or

(b) the issuance of a Contingent Claim Crystallisation Notice to which: (i) no Contingent

Claim Crystallisation Challenge is issued in response within seventeen (17) days of

such Contingent Claim Crystallisation Notice; and (ii) no Contingent Claim

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Crystallisation Determination is issued within thirty eight (38) days of such Contingent

Claim Crystallisation Notice.

“Data Room” means the virtual data room to be established by the Scheme Manager within

twenty eight (28) days from the Restructuring Effective Date through a service provider of the

Scheme Manager’s choice. Within fourteen (14) days from the Scheme Effective Date, each

Unsecured Scheme Party shall notify the Scheme Manager of the relevant information

(including electronic mail address) of two individuals whom the Scheme Manager shall grant

access rights to the Data Room. These individuals will receive automated notifications each

time the Scheme Manager uploads a document into the Data Room.

“Debt Securities Claims” means the Perpetual Capital Securities Holders Claims and the

Preference Shareholders Claims.

“Debt Securities Claims Cash Consideration” means cash of an amount equal to

S$27,000,000.

“Debt Securities Claims Equity Consideration” means Shares constituting 9.00% of the

issued and paid up capital in the Company after the New Shares (as defined in the

Restructuring Agreement) have been allotted and issued under the Restructuring Agreement.

“Debt Securities Scheme Parties” means the Perpetual Capital Securities Holders and the

Preference Shareholders.

“Depositor” means “depositor” under section 81SF of the SFA.

“Depository Agent” means “depository agent” under section 81SF of the SFA.

“Escrow Account” means the escrow account maintained with the Escrow Agent in

accordance with the terms of the Scheme.

“Escrow Agent” means an agent to be appointed by the Scheme Manager for the purposes

of managing the Escrow Account in accordance with the terms of the Scheme.

“Escrow Agreement” means the escrow agreement in a form to be agreed with the Advisors

of the Unsecured Working Group and the Informal Steering Committee (Notes) to be entered

into by and between the Company and the Escrow Agent in relation to the Escrow Account to

be managed in accordance with the terms of the Scheme.

“Excluded Claim” means:

(a) any Scheme Claim (as defined in each of the Hydrochem Scheme, the HMM Scheme

and/or the HE Scheme);

(b) any Claim in respect of Professional Advisor Fees;

(c) any Claim of the Notes Trustee for its fees and related costs and expenses arising

under or in respect of the Notes Trust Deed;

(d) any Claim of the Perpetual Capital Securities Trustee for its fees and related costs and

expenses arising under or in respect of the Perpetual Capital Securities Trust Deed;

A-6

(e) any Claim of Tuaspring Pte Ltd;

(f) any Claim arising under or in respect of the MHI Settlement Agreement;

(g) any Claim arising under or in respect of the TuasOne Share Charge; or

(h) any Claim arising under or in respect of the matters set out in Schedule 3 of the Scheme

as supplemented, amended and restated from time to time.

“Expired Contingent Claim” means any Contingent Claim which:

(a) is not an Extinguished Contingent Claim within 28 days from the Contingent Claim

Expiry Date; and

(b) is not a Crystallised Contingent Claim within 45 days from the Contingent Claim Expiry

Date.

“Explanatory Statement” means this explanatory statement issued by the Company and

dated 22 February 2019 relating to the Scheme.

“Extinguished” means, in respect of an Accepted Contingent Claim:

(a) the issuance of a Contingent Claim Extinguishment Notice to which no Contingent

Claim Extinguishment Challenge is received within fourteen (14) days; or

(b) the issuance of a Contingent Claim Extinguishment Determination under which the

subject Accepted Contingent Claim is determined by the Scheme Manager to be no

longer a Liability.

“Facilities” means the loan agreements, credit agreements, facility letters and all other credit

facility documents made between the Company and any bank or financial institution or

executed by the Company in favour of any bank or financial institution as set out in Schedule 1

of the Scheme.

“Facilities Lender” means each of the lenders under the respective Facilities.

“Facilities Claim” means any Claim of the Facilities Lenders that is not an Excluded Claim

arising under or in respect of the Facilities.

“Final Distribution Date” means the date on which all Scheme Consideration shall have

been issued and/or distributed (as applicable) to the Scheme Parties.

“Final Unsecured Claim Cash Payout” means in respect of each Accepted Unsecured Claim

that is not an Extinguished Contingent Claim or an Expired Contingent Claim after the

Contingent Claim Expiry Date, a cash payout to be calculated in the following manner:

𝐹𝑈𝐶𝐶𝑃 = (𝑝

𝑞 − 𝑥 − 𝑦× ( 𝑈𝐶𝐶𝐶 − ∑ 𝐹𝐶𝐶𝑀𝑃 − ∑ 𝑆𝐶𝐶𝑀𝑃)) − 𝐼𝑈𝐶𝐶𝑃 − 𝑆𝑈𝐶𝐶𝑃

where:

p is the value of the subject Accepted Unsecured Claim that is not an Extinguished Contingent

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Claim or an Expired Contingent Claim after the Contingent Claim Expiry Date;

q is the total value of all Accepted Unsecured Claims;

x is the total value of all Accepted Contingent Claims that have been Extinguished within the

Contingent Claim Expiry Date;

y is the total value of all Accepted Contingent Claims that become Expired Contingent Claims

after the Contingent Claim Expiry Date;

UCCC is the Unsecured Claims Cash Consideration;

∑ 𝑭𝑪𝑪𝑴𝑷 is the sum of all First Contingent Claim Management Payouts;

∑ 𝑺𝑪𝑪𝑴𝑷 is the sum of all Second Contingent Claim Management Payouts;

IUCCP is the Initial Unsecured Claim Cash Payout for the subject Accepted Unsecured Claim,

to be rounded down to the nearest cent;

SUCCP is the Second Unsecured Claim Cash Payout for the subject Accepted Unsecured

Claim, to be rounded down to the nearest cent; and

FUCCP is the Final Unsecured Claim Cash Payout for the subject Accepted Unsecured

Claim, to be rounded down to the nearest cent.

“Final Unsecured Claim Equity Payout” means in respect of each Accepted Unsecured

Claim that is not an Extinguished Contingent Claim or an Expired Contingent Claim after the

Contingent Claim Expiry Date, an allotment and issuance of Shares to be calculated in the

following manner:

𝐹𝑈𝐶𝐸𝑃 = (𝑝

𝑞 − 𝑥 − 𝑦 × 𝑈𝐶𝐸𝐶) − 𝐼𝑈𝐶𝐸𝑃 − 𝑆𝑈𝐶𝐸𝑃

where:


Claim or an Expired Contingent Claim after the Contingent Claim Expiry Date;


x is the total value of all Accepted Contingent Claims that have been Extinguished within the

Contingent Claim Expiry Date;

y is the total value of all Accepted Contingent Claims that become Expired Contingent Claims

after the Contingent Claim Expiry Date;

UCEC is the Unsecured Claims Equity Consideration;

IUCEP is the Initial Unsecured Claim Equity Payout for the subject Accepted Unsecured

Claim, to be rounded down to the nearest whole number;

SUCEP is the Second Unsecured Claim Equity Payout for the subject Accepted Unsecured

A-8

Claim, to be rounded down to the nearest whole number; and

FUCEP is the Final Unsecured Claim Equity Payout for the subject Accepted Unsecured

Claim, to be rounded down to the nearest whole number.

“First Contingent Claim Management Payout” means in respect of each Accepted

Contingent Claim that is Extinguished within the date falling one (1) year after the

Restructuring Effective Date, a cash payout to be calculated in the following manner:

𝐹𝐶𝐶𝑀𝑃 = 20% ×𝑟

𝑞 × 𝑈𝐶𝐶𝐶

where:

r is the value of the subject Accepted Contingent Claim that is Extinguished within the date

falling one (1) year after the Restructuring Effective Date;


UCCC is the Unsecured Claims Cash Consideration; and

FCCMP is the First Contingent Claim Management Payout for the subject Accepted

Contingent Claim, to be rounded down to the nearest cent.

“Global Note Certificate” means a global certificate or global note in registered form

representing the entire issue of the Series 008 Notes, the Series 009 Notes or the Series 010

Notes, as applicable.

“Global Share Certificates” means global share certificates in registered form representing

the entire issue of the Preference Shares.

“Group” means the Company and its Subsidiaries.

“HE” means Hyflux Engineering Pte Ltd, a wholly-owned subsidiary of the Company

incorporated in Singapore with registration number 200009792D whose registered office is

located at 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949.

“HE Scheme” means the scheme of arrangement proposed by HE under Section 210 of the

Act in its present form or with or subject to any modifications, additions or conditions approved

or imposed by the Court or approved in accordance with its terms.

“HMM” means Hyflux Membrane Manufacturing (S) Pte Ltd, a wholly-owned subsidiary of the

Company incorporated in Singapore with registration number 200702494M whose registered

office is located at 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949.

“HMM Scheme” means the scheme of arrangement proposed by HMM under Section 210 of

the Act in its present form or with or subject to any modifications, additions or conditions

approved or imposed by the Court or approved in accordance with its terms.

“Holding Period” means the period commencing on and from the Restructuring Effective

Date and ending on the date falling six (6) months after the Final Distribution Date.

A-9

“HS Claim” means any Claim(s) of HyfluxShop Holdings Ltd or a Subsidiary of HyfluxShop

Holdings Ltd that is not an Excluded Claim.

“HS Claimant” means any person that holds a HS Claim.

“Hydrochem” means Hydrochem (S) Pte Ltd, a wholly-owned subsidiary of the Company

incorporated in Singapore with registration number 198902670Z, whose registered office is

located at 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949.

“Hydrochem Scheme” means the scheme of arrangement proposed by Hydrochem under

Section 210 of the Act in its present form or with or subject to any modifications, additions or

conditions approved or imposed by the Court or approved in accordance with its terms.

“Independent Assessor” means an independent assessor appointed in accordance with the

Proof Regulations.

“Informal Steering Committee (Notes)” means the informal steering committee for

Noteholders established by SIAS in connection with the Restructuring that is represented by

FTI Consulting (Singapore) Pte Ltd, Akin Gump Strauss Hauer & Feld, Akin Gump Strauss

Hauer & Feld LLP and BlackOak LLC.

“Informal Steering Committee (P&P)” means the informal steering committee for Perpetual

Capital Securities Holders and Preference Shareholders established by SIAS in connection

with the Restructuring that is represented by PricewaterhouseCoopers Advisory Services Pte

Ltd and Drew & Napier LLC.

“Initial Unsecured Claim Cash Payout” means in respect of each Accepted Unsecured

Claim, a cash payout to be calculated in the following manner:

𝐼𝑈𝐶𝐶𝑃 =𝑝


where:

p is the value of the subject Accepted Unsecured Claim;




to be rounded down to the nearest cent.

“Initial Unsecured Claim Equity Payout” means in respect of each Accepted Unsecured

Claim, an allotment and issuance of Shares to be calculated in the following manner:

𝐼𝑈𝐶𝐸𝑃 =𝑝

𝑞 × 𝑈𝐶𝐸𝐶

where:

A-10

p is the value of the subject Accepted Unsecured Claim;


UCEC is the Unsecured Claims Equity Consideration; and



“Intercompany Claim” means any Claim of a Subsidiary of the Company that is: (i) not an

Excluded Claim; and (ii) not a Claim arising under or in respect of the TuasOne EPC Contract

Parent Company Guarantee.

“Intercompany Claimant” means any person that holds an Intercompany Claim.

“Investor” means SM Investments Pte Ltd.

“KfW” means KfW IPEX-Bank GmbH.

“KfW Facility” means the facility agreement dated 29 May 2013 entered into between:

(i) Hydrochem, as borrower; (ii) the Company, as guarantor; and (iii) KfW, as lender.

“KfW Claim” means any Claim of KfW that is not an Excluded Claim arising under or in

respect of the KfW Facility.

“Khurais Project” means the seawater reverse osmosis and sulphate removal facilities

package awarded to Hydrochem Saudi Ltd by Snamprogetti Saudi Arabia Co Ltd.

“Liability” or “Liabilities” means any debt, liability or obligation whether it is fixed or

undetermined, whether incurred solely or jointly or as principal or surety or in any other

capacity, whether or not it involves the payment of money or performance of an act or

obligation and whether it arises at common law, in equity or by statute, in Singapore or any

other jurisdiction, or in any manner whatsoever. For the avoidance of doubt, Liability includes

any debt, liability or obligation that is present, future, prospective, actual or contingent.

“Loan Agreement” means the shareholder’s loan agreement dated 18 October 2018 entered

into between: (i) the Company, as borrower; and (ii) the Investor, as lender, and which is set

out at Appendix C of this Explanatory Statement.

“Long-Stop Date” means the Long-Stop Date (as defined in the Restructuring Agreement) or

such later date agreed between the Company and the Investor.

“Magtaa Project” means the desalination plant in Magtaa, Oran, Western Algeria which is

owned by Tahalyat Myah Magtaa SpA.

“Meeting Agent” means Boardroom Corporate & Advisory Services Pte Ltd, whose address

is at 50 Raffles Place #32-01 Singapore Land Tower, Singapore 048623, being the meeting

agent appointed by the Company in relation to the Scheme Meetings.

“MHI Group” means (i) Mitsubishi Heavy Industries, Ltd; (ii) Mitsubishi Heavy Industries Asia

Pacific Pte Ltd; and (iii) Mitsubishi Heavy Industries Environmental, collectively.

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“MHI Settlement Agreement” means the settlement agreement dated 15 February 2019

entered into between: (i) Mitsubishi Heavy Industries, Ltd; (ii) Mitsubishi Heavy Industries Asia

Pacific Pte Ltd; (iii) Mitsubishi Heavy Industries Environmental & Chemical Engineering Co,

Ltd; (iv) the Company; (v) HE; (vi) Hydrochem; (vii) TuasOne Pte Ltd; and (viii) TuasOne

Environmental Engineering Pte Ltd, a copy of which is set out at Appendix F of this

Explanatory Statement.

“Noteholders” means the Series 008 Noteholders, the Series 009 Noteholders and the Series

010 Noteholders.

“Notes” means the Series 008 Notes, the Series 009 Notes and the Series 010 Notes.

“Notes Claim” means any Claim of the Noteholders that is not an Excluded Claim arising

under or in respect of the Notes.

“Notes Trust Deed” means the trust deed dated 3 July 2008 entered into between: (i) the

Company, as issuer; and (ii) the Notes Trustee, as trustee.

“Notes Trustee” means DBS Trustee Limited.

“Other Claim” means any Claim other than a Contingent Claim, an Excluded Claim, a

Facilities Claim, the KfW Claim, a Subordinated Claim, a Notes Claim, a Perpetual Capital

Securities Claim or a Preference Shares Claim.

“Other Claimant” means any person that holds an Other Claim.

“Perpetual Capital Securities” means the 6.00% perpetual capital securities (ISIN:

SG31B4000005) issued by the Company and constituted pursuant to the Perpetual Securities

Trust Deed, of which S$500,000,000 in aggregate principal amount are outstanding as at the

date of the Scheme.

“Perpetual Capital Securities Holder” means a person holding a Book Entry Interest in the

Perpetual Capital Securities.

“Perpetual Capital Securities Cash Consideration” means cash allocated from the Debt

Securities Claims Cash Consideration to be calculated in the following manner:

𝑃𝐶𝑆𝐶𝐶 =𝑎

𝑎 + 𝑏× 𝐷𝑆𝐶𝐶𝐶

where:

a is the total dollar value of all Accepted Perpetual Capital Securities Claims;

b is the total dollar value of all Accepted Preference Shares Claims;

DSCCC is the Debt Securities Claims Cash Consideration; and

PCSCC is the Perpetual Capital Securities Cash Consideration.

“Perpetual Capital Securities Cash Payout” means in respect of each Accepted Perpetual

Capital Securities Claim, a cash payout to be calculated in the following manner:

A-12

𝑃𝐶𝑆𝐶𝑃 =𝑐

𝑑× 𝑃𝐶𝑆𝐶𝐶

where:

c is the number of units of Perpetual Capital Securities held by the Perpetual Capital

Securities Holder in respect of the subject Accepted Perpetual Capital Securities Claim;

d is the total number of units of Perpetual Capital Securities in respect of all Accepted

Perpetual Capital Securities Claims;

PCSCC is the Perpetual Capital Securities Cash Consideration; and

PCSCP is the Perpetual Capital Securities Cash Payout for the subject Accepted Perpetual

Capital Securities Claim, to be rounded down to the nearest cent.

“Perpetual Capital Securities Claim” means any Claim of a Perpetual Capital Securities

Holder that is not an Excluded Claim arising under or in respect of the Perpetual Capital

Securities.

“Perpetual Capital Securities Equity Consideration” means Shares allocated from the

Debt Securities Claims Equity Consideration to be calculated in the following manner:

𝑃𝐶𝑆𝐸𝐶 =𝑎

𝑎 + 𝑏× 𝐷𝑆𝐶𝐸𝐶

where:



DSCEC is the Debt Securities Claims Equity Consideration; and

PCSEC is the Perpetual Capital Securities Equity Consideration.

“Perpetual Capital Securities Equity Payout” means in respect of each Accepted Perpetual

Capital Securities Claim, an allotment and issuance of Shares to be calculated in the following

manner:

𝑃𝐶𝑆𝐸𝑃 =𝑐

𝑑× 𝑃𝐶𝑆𝐸𝐶

where:

c is the number of units of Perpetual Capital Securities held by the Perpetual Capital

Securities Holder in respect of the subject Accepted Perpetual Capital Securities Claim;

d is the total number of units of Perpetual Capital Securities in respect of all Accepted

Perpetual Capital Securities Claims;

PCSEC is the Perpetual Capital Securities Equity Consideration; and

PCSEP is the Perpetual Capital Securities Equity Payout for the subject Accepted Perpetual

A-13

Capital Securities Claim, to be rounded down to the nearest whole number.

“Perpetual Capital Securities Trust Deed” means the trust deed dated 27 May 2016 entered

into between: (i) the Company, as issuer; and (ii) the Perpetual Capital Securities Trustee, as

trustee.

“Perpetual Capital Securities Trustee” means Perpetual (Asia) Limited.

“Personnel” means, in relation to any person, its current and former officers, partners,

directors, employees, staff, agents, counsel and other representatives.

“Preference Shareholder” means a person holding a Book Entry Interest in the Preference

Shares.

“Preference Shares” means the S$400,000,000 8.00% cumulative non-convertible non-

voting perpetual class A preference shares (ISIN: SG2D17969577) issued by the Company.

“Preference Shares Cash Consideration” means cash allocated from the Debt Securities

Claims Cash Consideration to be calculated in the following manner:

𝑃𝑆𝐶𝐶 =𝑏

𝑎 + 𝑏× 𝐷𝑆𝐶𝐶𝐶

where:



DSCCC is the Debt Securities Claims Cash Consideration; and

PSCC is the Preference Shares Cash Consideration.

“Preference Shares Cash Payout” means in respect of each Accepted Preference Shares

Claim, a cash payout to be calculated in the following manner:

𝑃𝑆𝐶𝑃 =𝑒

𝑓× 𝑃𝑆𝐶𝐶

where:

e is the number of Preference Shares held by the Preference Shareholder in respect of the

subject Accepted Preference Shares Claim;

f is the total number of Preference Shares in respect of all Accepted Preference Shares

Claims;

PSCC is the Preference Shares Cash Consideration; and

PSCP is the Preference Shares Cash Payout for the subject Accepted Preference Shares


“Preference Shares Claim” means any Claim of a Preference Shareholder that is not an

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Excluded Claim arising under or in respect of the Preference Shares.

“Preference Shares Equity Consideration” means Shares allocated from the Debt

Securities Claims Equity Consideration to be calculated in the following manner:

𝑃𝑆𝐸𝐶 =𝑏

𝑎 + 𝑏× 𝐷𝑆𝐶𝐸𝐶

where:



DSCEC is the Debt Securities Claims Equity Consideration; and

PSEC is the Preference Shares Equity Consideration.

“Preference Shares Equity Payout” means in respect of each Accepted Preference Shares

Claim, an allotment and issuance of Shares to be calculated in the following manner:

𝑃𝑆𝐸𝑃 =𝑒

𝑓× 𝑃𝑆𝐸𝐶

where:

e is the number of Preference Shares held by the Preference Shareholder in respect of the

subject Accepted Preference Shares Claim;

f is the total number of Preference Shares in respect of all Accepted Preference Shares

Claims;

PSEC is the Preference Shares Equity Consideration; and

PSEP is the Preference Shares Equity Payout for the subject Accepted Preference Shares


“Professional Advisor Fees” means any professional advisory fees and disbursements of

an Advisor reasonably incurred in connection with the Restructuring, which is to be paid by

the Company seven (7) days before the Settlement Date.

“Proof of Claim” means a proof setting out the claim of a Scheme Party substantially in the

form set out at Schedule 4 of the Scheme and Appendix D of this Explanatory Statement.

“Proof Regulations” means the Companies (Proofs of Debt in Schemes of Arrangement)

Regulation 2017 (No S 245) of Singapore.

“Qurayyat IWP” means the independent water project in Qurayyat, Sultanate of Oman owned

by Qurayyat Desalination SAOC.

“Record Date” means 5:00 pm on 1 March 2019, being the latest time a Proof of Claim must

be submitted to the Chairman to be assessed for the purposes of voting on the Scheme and

determining the entitlements of the Scheme Parties to the Scheme Consideration.

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“Relevant Intermediary” means a “relevant intermediary” under Section 181 of the Act.

“Restructuring” means the financial and corporate restructuring of the Group in accordance

with and as implemented through the 211B Proceedings, the HE Scheme, the HMM Scheme,

the Hydrochem Scheme, the Scheme and the Restructuring Documents.

“Restructuring Agreement” means the restructuring agreement dated 18 October 2018

entered into between: (i) the Company, as the target company; and (ii) the Investor, as the

investor, and which is set out at Appendix B of this Explanatory Statement.

“Restructuring Documents” means the Restructuring Agreement and the Loan Agreement.

“Restructuring Effective Date” means later of: (i) the date on which all of the Conditions

Precedent (other than Clause 5.1(d) of the Restructuring Agreement) are fulfilled or waived;

and (ii) the Scheme Effective Date.

“Scheme” means the scheme of arrangement proposed by the Company under Section 210

of the Act in its present form or with or subject to any modifications, additions or conditions

approved or imposed by the Court or approved in accordance with its terms.

“Scheme Consideration” means, in respect of:

(a) the Accepted Debt Securities Claims: (i) the Debt Securities Claims Cash Consideration;

and (ii) the Debt Securities Claims Equity Consideration; and

(b) the Accepted Unsecured Claims: (i) the Unsecured Claims Cash Consideration; and (ii)

the Unsecured Claims Equity Consideration;

(c) the Accepted Subordinated Party Claims: the Subordinated Claims Cash Consideration.

“Scheme Claims” means the Debt Securities Claims, the Unsecured Claims and the

Subordinated Claims.

“Scheme Effective Date” means the date on which the Court order sanctioning the Scheme

under the Act is lodged with ACRA.

“Scheme Manager” means the person appointed from time to time by the Court to administer

the Scheme, which may include Ms Angela Ee of Ernst & Young Solutions LLP.

“Scheme Meetings” means the meetings of the Scheme Parties to vote on the Scheme

convened pursuant to an order of the Court (and any meetings called following an

adjournment).

“Scheme Parties” means the Debt Securities Scheme Parties, the Unsecured Scheme

Parties and the Subordinated Scheme Parties.

“Scheme Proceedings” means the applications under Section 210(1) of the Act for leave to

convene meetings to consider this Scheme and the schemes of arrangement proposed by

HE, HMM and Hydrochem vide HC/OS 205/2019, HC/OS 204/2019, HC/OS 206/2019 and

HC/OS 207/2019, respectively, and all associated proceedings therein.

A-16

“Second Contingent Claim Management Payout” means in respect of each Accepted

Contingent Claim that is Extinguished after the date falling one (1) year after the Restructuring

Effective Date and within the Contingent Claim Expiry Date, a cash payout to be calculated

in the following manner:

𝑆𝐶𝐶𝑀𝑃 = 20% ×𝑠


where:

s is the value of the subject Accepted Contingent Claim that is Extinguished after the date

falling one (1) year after the Restructuring Effective Date and within the Contingent Claim

Expiry Date;



SCCMP is the Second Contingent Claim Management Payout for the subject Accepted

Contingent Claim, to be rounded down to the nearest cent.

“Second Unsecured Claim Cash Payout” means in respect of each Accepted Unsecured

Claim that is not an Extinguished Contingent Claim within one (1) year after the Restructuring

Effective Date, a cash payout to be calculated in the following manner:

𝑆𝑈𝐶𝐶𝑃 = (𝑝

𝑞 − 𝑡× ( 𝑈𝐶𝐶𝐶 − ∑ 𝐹𝐶𝐶𝑀𝑃)) − 𝐼𝑈𝐶𝐶𝑃

where:


Claim within one (1) year after the Restructuring Effective Date;


𝒕 is the total value of all Accepted Contingent Claims that have been Extinguished within one

(1) year after the Restructuring Effective Date;

UCCC is the Unsecured Claims Cash Consideration;

∑ 𝑭𝑪𝑪𝑴𝑷 is the sum of all First Contingent Claim Management Payouts;


to be rounded down to the nearest cent; and

SUCCP is the Second Unsecured Claim Cash Payout for the subject Accepted Unsecured


“Second Unsecured Claim Equity Payout” means in respect of each Accepted Unsecured

Claim that is not an Extinguished Contingent Claim within one (1) year after the Restructuring

Effective Date, an allotment and issuance of Shares to be calculated in the following manner:

A-17

𝑆𝑈𝐶𝐸𝑃 = (𝑝

𝑞 − 𝑡 × 𝑈𝐶𝐸𝐶) − 𝐼𝑈𝐶𝐸𝑃

where:


Claim within one (1) year after the Restructuring Effective Date;


t is the total value of all Accepted Contingent Claims that have been Extinguished within one

(1) year after the Restructuring Effective Date;

UCEC is the Unsecured Claims Equity Consideration;


Claim, to be rounded down to the nearest whole number; and

SUCEP is the Second Unsecured Claim Equity Payout for the subject Accepted Unsecured


“Securities” means the Notes, the Perpetual Securities and the Preference Shares.

“Series 008 Notes” means the 4.25% notes due 2018 (ISIN: SG6Q70974010) issued by the

Company and constituted pursuant to the Notes Trust Deed, of which S$100,000,000 in

aggregate principal amount is outstanding as at the date of this Explanatory Statement.

“Series 008 Noteholders” means persons holding a Book Entry Interest in the Series 008

Notes.

“Series 009 Notes” means the 4.60% notes due 2019 (ISIN: SG6Q77974112) issued by the




Notes.

“Series 010 Notes” means the 4.20% notes due 2019 (ISIN: SG6W23985057) issued by the




Notes.

“Settlement Date” means the date falling on or before twenty eight (28) days after the

Completion Date (as defined in the Restructuring Agreement).

“SFA” means the Securities and Futures Act, Chapter 289 of Singapore.

“SGXNet” means the online announcement platform hosted by SGX-ST.

A-18

“SGX-ST” means the Singapore Exchange Securities Trading Limited.

“Shares” means ordinary shares in the capital of the Company.

“SIAS” means the Securities Investors Association (Singapore).

“Singapore” means the Republic of Singapore.

“SMC” means the Singapore Mediation Centre.

“SRS” means the Supplementary Retirement Scheme established pursuant to the Income

Tax Act (Supplementary Retirement Scheme) Regulations 2003, S 30/2003 under the Income

Tax Act, Cap. 134 of Singapore.

“Subordinated Claim” means any Intercompany Claim and any HS Claim.

“Subordinated Claims Cash Consideration” means cash of an amount equal to the total

sum of all Subordinated Claim Cash Payouts.

“Subordinated Claim Cash Payout” means in respect of each Accepted Subordinated

Claim, a cash payout of S$1.

“Subordinated Scheme Parties” means the Intercompany Claimants and any HS Claimants.

“Subsidiary” means a subsidiary within the meaning of Section 5 of the Act.

“Tianjin Dagang DP” the desalination plant in Tianjin, People’s Republic of China owned by

H.J. NewSpring Limited.

“Tlemcen Project” means the seawater desalination plant in Souk Tleta, Wilaya of Tlemcen,

Algeria which is owned by Almiyah Atillemçania SpA.

“Tuaspring IWPP” means the integrated water and power project in Singapore owned by

Tuaspring Pte Ltd.

“TuasOne EPC Contract” means the contract for design, engineering, procurement,

construction, completion, start-up, testing and commissioning of waste-to-energy plant dated

26 April 2016 entered into between: (i) TuasOne Pte Ltd, as employer; and (ii) Hydrochem,

as contractor.

“TuasOne EPC Contract Parent Company Guarantee” means the deed of guarantee dated

12 May 2016 made by the Company, as guarantor, for the benefit of TuasOne Pte Ltd, in

respect of the obligations of Hydrochem under the TuasOne EPC Contract.

“TuasOne Facility” means the facility agreement dated 12 May 2016 entered into between:

(i) TuasOne Pte Ltd, as borrower; (ii) the banks and financial institutions listed in Schedule 1,

as original lenders; (iii) DBS Bank Ltd, Maybank Kim Eng Securities Pte Ltd, Mizuho Bank,

Ltd and The Bank of Tokyo-Mitsubishi UFJ, Ltd, as arranger; (iv) Malayan Banking Berhad,

Singapore Branch, as agent; and (v) the TuasOne Facility Security Trustee, as security

trustee.

“TuasOne Facility Security Trustee” means Malayan Banking Berhad, Singapore Branch.

A-19

“TuasOne Project” means the project which is the subject of the TuasOne EPC Contract.

“TuasOne Share Charge” means the share charge executed by the Company dated 12 May

2016 in favour of the TuasOne Facility Security Trustee.

“Unsecured Claims” means the Contingent Claims, the Facilities Claims, the KfW Claim, the

Other Claims and the Notes Claims.

“Unsecured Claims Cash Consideration” means cash of an amount equal to

S$232,000,000.

“Unsecured Claims Cash Consideration Surplus Amount” means any residual cash from

the Unsecured Claims Cash Consideration left in the Escrow Account or held by the Company

three months before the expiry of the Holding Period that is not the subject of an ongoing

dispute between Hyflux and the original beneficiary of that residual cash payment under the

terms of the Scheme and after all cash payouts as set out in Clause Error! Reference source

not found..1 to Clause 4.1.9 of the Scheme have been made.

“Unsecured Claims Equity Consideration” means Shares constituting 27.00% of the issued

and paid up capital in the Company after the New Shares (as defined in the Restructuring

Agreement) have been allotted and issued under the Restructuring Agreement.

“Unsecured Claims Equity Consideration Surplus Amount” means any residual Shares

from the Unsecured Claims Equity Consideration left in the Escrow Account or held by the

Company three months before the expiry of the Holding Period that is not the subject of an

ongoing dispute between Hyflux and the original beneficiary of those residual Shares under

the terms of the Scheme and after all equity payouts as set out in Clause Error! Reference

source not found..1 to Clause 4.1.9 of the Scheme have been made.

“Unsecured Scheme Parties” means the Contingent Claimants, the Facilities Lenders, KfW,

the Noteholders and the Other Claimants.

“Unsecured Working Group” means the unsecured working group comprising certain

Unsecured Scheme Parties including Mizuho Bank, Ltd, KfW, Bangkok Bank Public Company

Limited, Standard Chartered Bank, Singapore Branch, BNP Paribas, CTBC Bank Co, Ltd and

The Korea Development Bank established in connection with the Restructuring that is

represented by Borrelli Walsh Limited, Hogan Lovells Lee & Lee and Tan Kok Quan

Partnership.

In this Explanatory Statement, unless the context otherwise requires or as otherwise expressly stated:

1.1.1 references to Clauses and Schedules are references to clauses and schedules of

this Explanatory Statement;

1.1.2 references to a person include a reference to an individual, firm, partnership,

company, corporation, unincorporated body of persons or any state or state agency;

1.1.3 references to a statute, statutory provision or regulatory rule or guidance include

references to the same as subsequently modified, amended or re-enacted from time

to time;

A-20

1.1.4 references to an agreement, deed or document shall be deemed also to refer to

such agreement, deed or document as amended, supplemented, restated, verified,

replaced and/or novated (in whole or in part) from time to time and to any agreement,

deed or document executed pursuant thereto, provided that such amendment,

supplement, restatement, verification, replacement and/or novation has, to the

extent it relates to a Restructuring Document, been made in accordance with the

terms of such Restructuring Document;

1.1.5 the singular includes the plural and vice versa and words importing one gender shall

include all genders;

1.1.6 references to “including” shall be construed as references to “including without

limitation” and “include”, “includes” and “included” shall be construed accordingly;

1.1.7 headings to Clauses and Schedules are for ease of reference only and shall not

affect the interpretation of this Explanatory Statement;

1.1.8 references to a period of days shall include Saturdays, Sundays and public holidays

and where the date which is the final day of a period of days is not a Business Day,

that date will be adjusted so that it is the first following day which is a Business Day;

1.1.9 references to “dollar” or to “S$” are references to the lawful currency from time to

time of Singapore;

1.1.10 references to time shall be to Singapore time; and

1.1.11 where any amount is specified in this Explanatory Statement (including in any

definition) in respect of any Scheme Consideration, that amount is subject to

rounding in accordance with the terms of the Scheme.

Appendix B – Restructuring Agreement

Appendix C – Loan Agreement

Execution Copy

DATED THIS DAY OF 2018

Between

SM INVESTMENTS PTE. LTD.

as Lender

and

HYFLUX LTD

as Borrower

SHAREHOLDER’S LOAN AGREEMENT

WONGPARTNERSHIP LLP

12 Marina Boulevard Level 28

Marina Bay Financial Centre Tower 3

Singapore 018982

Tel: +65 6416 8000

Fax: +65 6532 5711 /+ 65 6532 5722

Email: [email protected]

Website: http://www.wongpartnership.com

18TH OCTOBER

TABLE OF CONTENTS

CLAUSE HEADING PAGE

1. DEFINITIONS AND INTERPRETATION ...................................................................... 1

2. THE LOAN .................................................................................................................... 2

3. REPAYMENT AND PAYMENT OF INTEREST ............................................................ 4

4. PAYMENTS .................................................................................................................. 4

5. REPRESENTATIONS ................................................................................................... 5

6. UNDERTAKINGS .......................................................................................................... 5

7. ACCELERATION .......................................................................................................... 6

8. COSTS .......................................................................................................................... 7

9. ASSIGNMENTS AND SUCCESSORS ......................................................................... 7

10. REMEDIES AND WAIVERS ......................................................................................... 7

11. VARIATIONS ................................................................................................................ 7

12. PARTIAL INVALIDITY................................................................................................... 7

13. CONFIDENTIALITY AND ANNOUNCEMENTS ........................................................... 7

14. ILLEGALITY .................................................................................................................. 8

15. FURTHER ASSURANCE AND WAIVER...................................................................... 8

16. SET-OFF ....................................................................................................................... 8

17. COMMUNICATIONS..................................................................................................... 8

18. COUNTERPARTS ........................................................................................................ 8

19. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT .................................................... 8

20. GOVERNING LAW ....................................................................................................... 9

THIS SHAREHOLDER’S LOAN AGREEMENT is made on 2018

BETWEEN:

(1) SM INVESTMENTS PTE. LTD., (Company Registration No. 201835450K), a company

incorporated in Singapore and having its registered address at 1 Scotts Road, #25-08 Shaw

Centre, Singapore 228208, as lender (the "Lender"); and

(2) HYFLUX LTD, (Company Registration No. 200002722Z), a company incorporated in

Singapore and having its registered office at 80 Bendemeer Road, Hyflux Innovation Centre,

Singapore 339949 (the "Borrower"),

(collectively, the "Parties" and each, a "Party").

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement:

"Applicable Laws" means, with respect to any person, any and all applicable treaties,

legislation, laws, regulations, codes, rules including without limitation, the listing manual of the

SGX-ST and the Code or rulings, orders, or any form of decisions issued by, or requirements

of, governmental, statutory, regulatory, supervisory bodies (including without limitation, any

relevant stock exchange or securities council) or any court or tribunal with competent

jurisdiction, whether in Singapore or elsewhere, as amended or modified from time to time, and

to which such person is subject.

"Business Day" means a day (excluding Saturdays, Sundays and gazetted public holidays) on

which commercial banks are open for business in Singapore.

"Code" means the Singapore Code on Take-overs and Mergers.

“Completion” has the meaning ascribed to it in the Restructuring Agreement.

“Completion Date” has the meaning ascribed to it in the Restructuring Agreement.

"Confidential Information" means any information which is proprietary and confidential to a

Party including but not limited to the terms and conditions of this Agreement, information

concerning or relating in any way whatsoever to the organisation, business, finances,

transactions or affairs of either Party, dealings of either Party, secret or confidential information

which relates to a Party's business or any of its principals', clients' or customers' transactions

or affairs, any Party's technology, designs, documentation, manuals, budgets, financial

statements or information, accounts, dealers' lists, customer lists, marketing studies, drawings,

notes, memoranda and the information contained therein, or services and information and

material which is either marked confidential or is by its nature intended to be exclusively for the

knowledge of the recipient alone.

"Definitive Agreements" means this Agreement, the Restructuring Agreement and any other

document designated as such by mutual agreement of the Lender and the Borrower.

“Event of Default” means any event or circumstance set out in Clause 7.1 (Acceleration).

18 October

"Loan" has the meaning attributed to it in Clause 2.1 (Principal).

"Restructuring Agreement" means the restructuring agreement relating to the debt and equity

of the Borrower dated on or about the date hereof between the Parties.

"SGX-ST" means the Singapore Exchange Securities Trading Limited.

“Scheme of Arrangement” has the meaning ascribed to it in the Restructuring Agreement.

"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature

(including any penalty or interest payable in connection with any failure to pay or any delay in

paying any of the same).

1.2 Construction

(a) Unless a contrary indication appears, any reference in this Agreement to:

(i) the "Borrower", the "Lender", or any "Party" shall be construed so as to

include its successors in title, permitted assigns and permitted transferees;

(ii) a "person" includes any person, firm, company, corporation, government,

state or agency of a state or any association, trust or partnership (whether or

not having separate legal personality), or two or more of the foregoing;

(iii) a provision of law is a reference to that provision as amended or re-enacted;

and

(iv) a time of day and dates are references to Singapore time unless otherwise

stated.

(b) The headings in this Agreement are for ease of reference only and shall be ignored in

construing this Agreement. References to "Clause" are to be construed as references

to the clauses of this Agreement.

(c) Words importing the singular shall, where applicable, include the plural and vice versa

and words importing the masculine gender shall, where applicable, include the feminine

and neuter genders.

(d) As both Parties have participated in the drafting of this Agreement, the Parties agree

that any Applicable Law or rule requiring the construction of this Agreement or any

provision hereof against the Party drafting this Agreement shall not apply.

2. THE LOAN

2.1 Principal

The Lender agrees to grant to the Borrower, upon the terms and conditions hereof, a loan of

the aggregate principal amount of S$130,000,000 (the "Loan").

2.2 Advance

The Lender shall disburse the entire amount of the proceeds of the Loan to the Borrower's

account or by any means notified by the Borrower on the Completion Date and at any time

thereafter.

2.3 Conditions Precedent

The Lender will only be obliged to comply with Clause 2.2 (Advance) if:

(a) the Restructuring Agreement is in full force and effect and the conditions set out in

Clause 5 (Conditions) of the Restructuring Agreement have been fulfilled or waived in

accordance with the terms of the Restructuring Agreement;

(b) Completion has occurred, or the Lender, acting reasonably, is satisfied that the

disbursements of the proceeds of the Loan will occur at the same time as Completion;

(c) all the representations and warranties as set out in Clause 5.1 (Borrower’s

Representations) are true in all material respects; and

(d) the following conditions precedent have been delivered:

(i) a copy of the constitutional documents of the Borrower;

(ii) a copy of the board resolutions of the Borrower (certified by a director or a duly

authorised officer of the Borrower) approving the terms of, and the transactions

contemplated by this Agreement and ratifying the entry by the Borrower into

this Agreement; and

(iii) to the extent required by Applicable Law, the approval of the shareholders of

the Borrower obtained at a general meeting of the Company, of the terms of,

and the transactions contemplated by this Agreement and ratifying the entry

by the Borrower into this Agreement.

The Lender may waive any or all of the above conditions precedent.

2.4 Purpose and Use

The Parties agree that the Loan shall be applied by the Borrower towards meeting the working

capital needs of the business of the Borrower and its subsidiaries.

2.5 Interest and Default Interest

(a) Interest on the Loan shall accrue from the Borrower to the Lender at the rate which is

4.5% per annum calculated on the principal amount of the Loan outstanding from time

to time.

(b) All interest payable under this Agreement shall accrue from day to day on the total

amount of the Loan outstanding and shall be calculated on the basis of the actual

number of days elapsed and over a 365-day year.

(c) If the Borrower fails to make any payment under this Agreement on the due date for

such payment, interest on the unpaid amount shall accrue daily, from the date of non-

payment to the date of actual payment (both before and after judgment), at 2.0% above

the rate specified in Clause 2.5(a) above.

2.6 Interest Period and Payment

The Borrower shall pay interest accrued on the Loan on the date when repayment of the

principal of the Loan is due hereunder. All interest unpaid shall at the end of each Interest

Period, be compounded by being added to the principal of the Loan then outstanding and shall

bear interest accordingly. For the purposes hereof, “Interest Period” means, subject to the

provisions of this Clause 2.6, each period of three (3) months but:

(a) the first Interest Period shall commence on the date of the first borrowing of the Loan

and shall end on last day of the Borrower’s financial quarter in which the borrowing is

made; and

(b) the first Interest Period relating to any part of the Loan other than the first borrowing

thereof shall commence on the date of its borrowing, and all other Interest Periods shall

commence on the last day of the preceding Interest Period (without double counting),

and in each case, the Interest Periods shall end on the last day of the then current

Interest Period relating to the first borrowing of the Loan so that all Interest Periods

shall be consolidated at all times.

2.7 Security

The Loan shall be unsecured.

3. REPAYMENT AND PAYMENT OF INTEREST

3.1 Repayment Date

The Borrower shall repay the Loan in full and all outstanding interest on it and all other sums

outstanding under or in connection with this Agreement on the date which is three (3) years

after the date of the first drawdown of the Loan.

3.2 Prepayment

The Borrower may, if it gives the Lender not less than three (3) Business Days' (or such shorter

period as the Lender may agree) prior notice, prepay, without any prepayment fee, penalty or

break costs, the whole or any part of the Loan. All prepayment shall be accompanied by

payment of the interest accrued thereon.

3.3 No Reborrowing

No amount repaid or prepaid may be reborrowed.

4. PAYMENTS

4.1 All payments to be made hereunder shall be made in Singapore Dollars and in immediately

available funds.

4.2 All payments to be made by the Borrower hereunder shall be paid without any set-off or

counterclaim and free of any restriction or condition.

4.3 All payments to be made by the Borrower hereunder shall be made to such bank account of

the Lender in Singapore as the Lender may from time to time designate for such purpose.

4.4 All payments to be made by the Borrower to the Lender shall be made free and clear of and

without deduction for or on account of Tax unless the Borrower is required to make such a

payment subject to the deduction or withholding of Tax.

5. REPRESENTATIONS

5.1 Borrower’s Representations

The Borrower hereby represents and warrants to the Lender that:

(a) it is a company duly incorporated and validly existing under the laws of Singapore;

(b) the execution and delivery of, and the performance by it of its obligations under this

Agreement shall not:

(i) conflict with or result in a breach of its constitution; or

(ii) result in a breach of any Applicable Laws by which it is bound; and

(c) it has full power and authority to execute and deliver this Agreement and the

agreements contemplated herein, and to consummate the transactions contemplated

hereby and thereby and that this Agreement and all such other agreements constitute

its valid and legally binding obligations, enforceable against it in accordance with their

respective terms.

5.2 Lender’s Representations

The Lender hereby represents and warrants to the Borrower that:

(a) it is a company duly incorporated and validly existing under the laws of Singapore;

(b) the execution and delivery of, and the performance by it of its obligations under this

Agreement shall not:

(i) conflict with or result in a breach of its constitution; or

(ii) result in a breach of any Applicable Laws by which it is bound;

(c) it has full power and authority to execute and deliver this Agreement and the

agreements contemplated herein, and to consummate the transactions contemplated

hereby and thereby and that this Agreement and all such other agreements constitute

its valid and legally binding obligations, enforceable against it in accordance with their

respective terms; and

(d) it has sufficient financial resources to grant the Loan.

6. UNDERTAKINGS

6.1 The Borrower shall obtain, comply with and do all that is necessary to maintain in full force and

effect any authorisation required under any law or regulation of its jurisdiction of incorporation

to enable it to perform its obligations under this Agreement and to ensure the legality, validity

and enforceability in its jurisdiction of incorporation of this Agreement.

6.2 The Borrower shall ensure that its respective obligations and liabilities hereunder rank and will

rank at all times in right of payment at least pari passu with all its other unsecured debts now

outstanding, except for obligations mandatorily preferred by law.

6.3 The undertakings in this Clause 6 remain in force from the date of this Agreement for so long

as any amount is outstanding under this Agreement.

7. ACCELERATION

7.1 Each of the events set out in this Clause 7.1 is an Event of Default, namely:

(a) An event or circumstance occurs which gives the Lender the right to terminate the

Restructuring Agreement under Clause 13 (Termination) of the Restructuring

Agreement;

(b) Any order is granted by a court in Singapore for or in relation to:

(i) the suspension of payments, a moratorium of any indebtedness, winding-up,

dissolution, judicial management, administration, provisional supervision or

reorganisation (by way of voluntary arrangement, scheme of arrangement or

otherwise) of the Borrower; or

(ii) the appointment of a liquidator or judicial manager in respect of the Borrower.

(c) The Borrower fails to pay any sum payable under this Agreement within five (5)

Business Days of its due date;

(d) Save for any indebtedness prevailing as at the date of this Agreement, the Borrower or

any material subsidiary or material related entity of the Borrower, fails to pay any sum

payable under any of its other finance documents;

(e) The Borrower fails to observe or perform any obligation (other than a payment

obligation) under this Agreement or any other Definitive Agreement, and such breach

entitles the Lender to terminate such agreement;

(f) It is or becomes unlawful for the Borrower to perform or comply with any or all of its

payment or other material obligations under this Agreement or any of its payment or

other material obligations are not or cease to be legal, valid, binding and enforceable;

(g) The Borrower rescinds or purports to rescind or repudiates or purports to repudiate this

Agreement or evidences an intention to rescind or repudiate this Agreement; or

(h) Any event or circumstance occurs in any jurisdiction analogous to any of the events

above in respect of the Borrower.

7.2 On and at any time after the occurrence of an Event of Default, the Lender may:

(a) cancel the Loan whereupon it shall immediately be cancelled;

(b) declare that all or part of the Loan, together with accrued interest, and all other amounts

accrued or outstanding under this Agreement be immediately due and payable,

whereupon they shall become immediately due and payable by the Borrower;

(c) declare that all or part of the Loan be payable on demand, whereupon they shall

immediately become payable on demand by the Lender; and/or

(d) exercise any or all of its rights, remedies, powers or discretions under this Agreement.

8. COSTS

Each of the Parties shall bear its own costs and expenses in relation to the negotiation,

preparation, execution, performance and enforcement of this Agreement and all ancillary

documents to the loan hereby agreed to be lent.

9. ASSIGNMENTS AND SUCCESSORS

No Party shall assign, transfer, create any encumbrance or otherwise deal with its rights or

interests under this Agreement without the prior written consent of the other Party.

10. REMEDIES AND WAIVERS

10.1 So far as is permitted by law and except in the case of fraud, each of the Parties agrees and

acknowledges that its only right and remedy in relation to any representation, warranty or

undertaking made or given in connection with this Agreement shall be for breach of the terms

of this Agreement (including any common law and equitable remedies) to the exclusion of all

other rights and remedies (including those in tort or arising under statute).

10.2 Any release, waiver or compromise of any obligation or term under this Agreement shall be in

writing and shall not be deemed to be a release, waiver or compromise of similar or any other

obligations or terms in the future.

10.3 No failure on the part of any Party to exercise, and no delay on its part in exercising, any right

or remedy under this Agreement will operate as a release or waiver, and any single or partial

exercise of any right or remedy shall not preclude any other or further exercise thereof or the

exercise of any other right or remedy.

11. VARIATIONS

11.1 No variation of this Agreement (or of any of the documents referred to in this Agreement) shall

be valid unless it is in writing and signed by or on behalf of each Party.

11.2 Unless expressly agreed, a variation shall not constitute a general waiver of any provisions of

this Agreement, nor shall it affect any rights, obligations or liabilities under or pursuant to this

Agreement which have already accrued up to the date of such variation.

12. PARTIAL INVALIDITY

If at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in

any respect under the law of any jurisdiction, neither the legality, validity or enforceability of the

remaining provisions of this Agreement nor of such provisions under the law of any other

jurisdiction shall in any way be affected or impaired thereby.

13. CONFIDENTIALITY AND ANNOUNCEMENTS

Clause 14 (Confidentiality and Announcements) of the Restructuring Agreement shall apply to

this Agreement as if set out in full herein with references to:

(a) “this Agreement” being construed as references to this Agreement;

(b) “Applicable Laws” and “Confidential Information” being as defined herein; and

(c) “this Clause 14” being construed as a reference to this Clause 13.

14. ILLEGALITY

The illegality, invalidity or unenforceability of any provision of this Agreement under the law of

any jurisdiction shall not affect its legality, validity or enforceability under the law of any other

jurisdiction nor the legality, validity or enforceability of any other provision.

15. FURTHER ASSURANCE AND WAIVER

The Borrower shall, at any time and from time to time, upon the reasonable request of the

Lender, promptly and duly execute and deliver to the Lender for the benefit of the Lender any

and all such further instruments and documents and do all acts and things as the Lender may

(acting reasonably) deem desirable for obtaining the full benefit of this Agreement and of the

rights and powers herein granted.

16. SET-OFF

The Lender may set off any matured obligation due from the Borrower under this Agreement

against any matured obligation owed by the Lender to the Borrower, regardless of the place of

payment or currency of either obligation. If the obligations are in different currencies, the Lender

may convert either obligation at a market rate of exchange in its usual course of business for

the purpose of the set-off.

17. COMMUNICATIONS

Each and every communication under this Agreement shall be in writing in the English language

and delivered in accordance with the terms of the Restructuring Agreement.

18. COUNTERPARTS

This Agreement may be entered into in any number of counterparts, all of which taken together

shall constitute one and the same instrument. Any Party may enter into this Agreement by

executing any such counterpart. Delivery of an executed signature page of a counterpart by fax

or in AdobeTM Portable Document Format (PDF) sent by electronic mail shall take effect as

delivery of an executed counterpart of this Agreement, and if either method is adopted, without

prejudice to the validity of such agreement, each Party shall provide the other with the original

of such page as soon as reasonably practicable thereafter.

19. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT

A person who is not party to this Agreement has no rights under the Contracts (Rights of Third

Parties) Act (Chapter 53B of Singapore) to enforce any term of this Agreement, but this does

not affect any right or remedy of a third party which exists or is available apart from the said

Act.

20. GOVERNING LAW

20.1 This Agreement shall be governed by, and construed in accordance with, the laws of Singapore.

20.2 The Parties agree to submit to the exclusive jurisdiction of the courts of Singapore. The Parties

agree that the courts of Singapore are an appropriate and convenient forum with jurisdiction to

settle any dispute arising out of or in connection with this Agreement, and waive any right to

raise the contrary.

Appendix D – Proof of Claim Forms

1

PROOF OF CLAIM FORM (FOR BANKS AND CONTINGENT CLAIMANTS)

HYFLUX LTD

(Company Registration No. 200002722Z)

(Incorporated in the Republic of Singapore on 31 March 2000)

(the "Company")

For use in connection with the notice published on 1 February 2019 for meeting(s) to be held for

considering and voting on a compromise or arrangement under the Companies Act (Cap. 50)

(“Scheme Meeting(s)”)

involving the obligations owed by the Company.

PLEASE REFER TO THE NOTES SET OUT AT THE END OF THIS FORM WHEN COMPLETING

THIS FORM

1. Particulars of party filing proof in relation to Scheme Meeting(s):

Name IC/Passport number /

Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any) #

# Please indicate reference number to be quoted for future correspondence in relation to this matter with

the Company, Chairman of the Scheme Meeting(s) and/or any relevant representative or appointed

person in relation to the Scheme Meeting(s).

2. Particulars of claim(s) against the Company:

S/N Date claim

arose ###

Payment due

date

Brief details of claim(s)## Currency Amount

Claimed

1.

2.

2

3.

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing this form.

The onus is upon the party claiming payment to prove the amounts claimed. Failure to do so may result

in the claim being rejected by the Chairman of the Scheme Meeting(s).

### The amount claimed shall be for all claims against the Company as at 25 March 2019 (including interest).

3. The completed proof of claim (with the relevant supporting documents) can be submitted in

either hard copy or via email to [email protected]. Hard copy proof of claim is to be sent

to: Hyflux Ltd, Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949.

4. The deadline for submission of the completed proof of claim (with relevant supporting

documents) is 5.00p.m. on Friday, 1 March 2019.

5. I/We declare that to the best of my knowledge and belief, the Company owes the party set out

in paragraph 1 above the obligations set out in paragraph 2 above.

Dated the day of 2019.

Signature:

……………………………………………......

3

NOTES:

1 A separate form for purpose of instructions on voting will be provided to the parties whose claims are

admitted in relation to the Scheme Meeting(s).

2 Please enclose or attach copies of documents substantiating the obligation claimed when filing this form.

The onus is upon the party claiming to be owed an obligation to prove the obligation claimed. Failure to

substantiate the obligations may result in the claim being rejected by the Chairman of the Scheme

Meeting(s).

3 By submitting this form, you represent, warrant and undertake to the Company and/or the Chairman of

the Scheme Meeting(s) that any personal data of any individual provided has been obtained with such

individual’s consent and hereby consents on behalf of such individual to the collection, processing, use

and disclosure of his/her personal data by the Company and/or the Chairman of the Scheme Meeting(s)

(and any of their respective officers), in each case, in accordance with the provisions of the Singapore

Personal Data Protection Act 2012 (No. 26 of 2012). Any consent given hereunder in relation to personal

data shall survive death, incapacity, bankruptcy or insolvency of any such individual and the holding ofthe Scheme Meeting(s). For the purposes hereunder, "personal data" has the meaning ascribed to it in

the Singapore Personal Data Protection Act 2012 (No. 26 of 2012).

4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1

PROOF OF CLAIM FORM (ONLY FOR SERIES 008/009/010)

HYFLUX LTD



(the "Company")




involving the

S$100,000,000 4.25 per cent. Notes due 2018 comprised in Series 008 (ISIN: SG6Q70974010)

S$65,000,000 4.60 per cent. Notes due 2019 comprised in Series 009 (ISIN: SG6Q77974112)

S$100,000,000 4.20 per cent. Notes due 2019 comprised in Series 010 (ISIN: SG6W23985057)

(collectively, the "Notes") issued by the Company.


THIS FORM

Only persons who are shown in the records of the Central Depository Pte Ltd (“CDP”) as a holder

of the Notes ("Direct Participant") may file this proof of claim ("Proof").

Beneficial owners of Notes held, directly or indirectly, by a Direct Participant (“Beneficial

Owners”) who wish to file a proof must contact such Direct Participant and instruct such Direct

Participant to file the Proof on its behalf. In all cases, Beneficial Owners should be aware that

other earlier deadlines may be imposed by such Direct Participant.

1. Particulars of party filing proof:

Name# IC/Passport number /

Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

required) ##

# Only a person who has opened and maintains a securities account shown in the records of CDP as a

holder of such Notes may file a proof.

## Please indicate reference number to be quoted for future correspondence in relation to this matter with



2

2. Particulars of holdings in respect of the Notes and any other claims asserted in relation to the

Notes:

S/N Date obligation

incurred ####

Brief details/description of obligation### Amount

Claimed

1.

2.

3.

### Please enclose or attach copies of documents evidencing your holdings and any other claims you may

have. Alternatively, by completing and returning this Proof, you authorise the Company to access the CDP

register for the purposes of verifying your holdings of the Notes. The onus is upon the party asserting an

obligation against the Company in respect of the Notes to prove the obligation claimed or to authorise the

Company to verify your holdings by accessing the CDP register. Failure to do so may result in the claim

being rejected by the Chairman of the Scheme Meeting(s).

#### The amount claimed should be the full principal of the Notes held by you and any other amounts (including

interest) claimed against the Company as at 25 March 2019.

3. The completed Proof (with the relevant supporting documents) can be submitted in either hard

copy or via email to [email protected]. Hard copy Proof is to be sent to: Hyflux Ltd,

Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949.

4. The deadline for submission of the completed Proof (with relevant supporting documents) is

5.00p.m. on Friday, 1 March 2019.

5. I/We declare that to the best of my knowledge and belief, the Company owes the obligations

set out in paragraph 2 above to me/the party set out in paragraph 1 above.


Signature:

……………………………………………......

3

NOTES:

1 If any person with a claim or any holdings in respect of the Notes does not submit this Proof or incorrectly

files a Proof, the proposed chairman of the Scheme Meeting(s) will admit, for the purpose of the Scheme

Meeting(s), a claim based on the holdings reflected in the records of the CDP for the Notes.

2 The records of CDP shall constitute conclusive and binding evidence for all purposes (including, without

limitation, for the purposes of assessing the principal amount of Notes held by each Direct Participant

which will be admitted by the Company and Chairman of the Scheme Meeting(s)).

3 A separate form for purpose of instructions on voting will be provided to the holders of the Notes and the

trustee for the Notes in relation to the Scheme Meeting(s).









4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949Reminder

Please ensure that you have submitted the items below by indicating √ against the items below:

Completed Proof of Claim form:

with supporting documents AND/OR

authorising the Company to access the CDP register for the purposes of verifying holdings of

the Notes

1

PROOF OF CLAIM FORM (ONLY FOR PERPETUAL SECURITIES)

HYFLUX LTD



(the "Company")




involving the

S$500,000,000 6.00 per cent. Perpetual Capital Securities (ISIN: SG31B4000005)

(the "Perpetual Securities") issued by the Company.


THIS FORM


of the Perpetual Securities ("Direct Participant") may file this proof of claim ("Proof").

Beneficial owners of Perpetual Securities held, directly or indirectly, by a Direct Participant

(“Beneficial Owners”) who wish to file a proof must contact such Direct Participant and instruct

such Direct Participant to file the Proof on the Beneficial Owner’s behalf. In all cases, Beneficial

Owners should be aware that earlier deadlines may be imposed by such Direct Participant.

1. Particulars of Direct Participant:


Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any)


holder of such Perpetual Securities may file a proof.

2

2. Particulars of holdings in respect of the Perpetual Securities and any other claims asserted in

relation to the Perpetual Securities:

S/N Date of

purchase of

Perpetual

Securities ####

Details of holdings/number of Perpetual

Securities held###

Amount

Claimed

(principal and

interest)

1.

2.

3.

### Please enclose or attach copies of documents reflecting your holdings. If any other claims are asserted

against the Company please enclose or attach copies of documents substantiating the claim. Alternatively,

by completing and returning this Proof, you authorise the Company to access the CDP register for the

purposes of verifying your holdings of the Perpetual Securities. The onus is on you to prove your holdings

and/or other claims. Failure to do so may result in the claim being rejected by the Chairman of the Scheme

Meeting(s).

#### The amount claimed should be the full principal of the Perpetual Securities, interest and any other amounts

(including interest) claimed by you against the Company until 25 March 2019.









Signature

……………………………………………......

3

NOTES:

1 If any person with a claim or any holdings in respect of the Perpetual Securities does not submit this Proof

or incorrectly files a Proof, the proposed chairman of the Scheme Meeting(s) will admit, for the purpose of

the Scheme Meeting(s), a claim based on the holdings reflected in the records of the CDP as of 25 March

2019 for the Perpetual Securities.

2 The records of CDP as of 25 March 2019 shall constitute conclusive and binding evidence for all purposes

(including, without limitation, for the purposes of assessing the principal amount of Perpetual Securities

held by each Direct Participant which will be admitted by the Company and Chairman of the Scheme

Meeting(s)).

3 A separate form for purpose of instructions on voting will be provided to the holders of the Perpetual

Securities and the trustee for the Perpetual Securities in relation to the Scheme Meeting(s).









4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

Reminder





the Perpetual Securities

1

PROOF OF CLAIM FORM (ONLY FOR PREFERENCE SHARES)

HYFLUX LTD



(the "Company")




involving the

S$400,000,000 8.00 per cent. Class A Cumulative Preference Shares (ISIN: SG2D17969577)

(the "Preference Shares") issued by the Company.


THIS FORM


of the Preference Shares ("Direct Participant") may file this proof of claim ("Proof").

Beneficial owners of Preference Shares held, directly or indirectly, by a Direct Participant

(“Beneficial Owners”) who wish to file a proof must contact such Direct Participant and instruct

such Direct Participant to file the Proof on the Beneficial Owner’s behalf. In all cases, Beneficial

Owners should be aware that earlier deadlines may be imposed by such Direct Participant.

1. Particulars of Direct Participant:


Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any)


holder of such Preference Shares may file a proof.

2

2. Particulars of holdings in respect of the Preference Shares and any other claims asserted in

relation to the Preference Shares:

3.

S/N Date of purchase of

Preference

Shares##

Details of holdings/number of Preference

Shares held#

Amount Claimed

(principal)

1.

2.

3.

# Please enclose or attach copies of documents reflecting your holdings. If any other claims are asserted

against the Company please enclose or attach copies of documents substantiating the claim. Alternatively,

by completing and returning this Proof, you authorise the Company to access the CDP register for the

purposes of verifying your holdings of the Preference Shares. The onus is on you to prove your holdings

and/or other claims. Failure to do so may result in the claim being rejected by the Chairman of the Scheme

Meeting(s).

## The amount claimed should be the full principal of the Preference Shares held by you and any other

amounts (including interest) claimed by you against the Company until 25 March 2019.









Signature

……………………………………………......

3

NOTES:

1 If any person with a claim or any holdings in respect of the Preference Shares does not submit this Proof

or incorrectly files a Proof, the proposed chairman of the Scheme Meeting(s) will admit, for the purpose of

the Scheme Meeting(s), a claim based on the holdings reflected in the records of the CDP as of 25 March

2019 for the Preference Shares.

2 The records of CDP as of 25 March 2019 shall constitute conclusive and binding evidence for all purposes

(including, without limitation, for the purposes of assessing the principal amount of Perpetual Securities

held by each Direct Participant which will be admitted by the Company and Chairman of the Scheme

Meeting(s)).

3 A separate form for purpose of instructions on voting will be provided to the holders of the Preference

Shares in relation to the Scheme Meeting(s).









4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949Reminder





the Preference Shares

1

PROOF OF CLAIM FORM (TRADE CREDITORS)

HYFLUX LTD



(the "Company")

For use in connection with the notice published on 1 February 2019 for meeting(s) to be held for considering and voting on a compromise or arrangement

under the Companies Act (Cap. 50) (“Scheme Meeting(s)”) involving obligations owed by the Company.

PLEASE REFER TO THE NOTES SET OUT AT THE END OF THIS FORM WHEN COMPLETING THIS FORM



Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if any) #

# Please indicate reference number to be quoted for future correspondence in relation to this matter with the Company, Chairman of the Scheme Meeting(s) and/or

any relevant representative or appointed person in relation to the Scheme Meeting(s).

2


S/N Date claim arose

(eg, date services

were contracted,

date work was

done, date goods

were delivered etc)###

Payment due date

(eg, date of invoice)

Brief details of claim(s)## Project in respect of which

the claim is made

Amount claimed

1.

2.

3.

3

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing this form. The onus is upon the party claiming payment to prove the

amounts claimed. Failure to do so may result in the claim being rejected by the Chairman of the Scheme Meeting(s).

### Only claims arising prior to 22 May 2018 (regardless of invoice date or when payment is claimed) are to be listed in this proof of claim (“Pre-Moratorium Claims”).

The amount(s) asserted in respect of the Pre-Moratorium Claims (including interest) should be calculated up to the cut-off date of 25 March 2019.

3. The completed proof of claim (with the relevant supporting documents) can be submitted in either hard copy or via email to [email protected].

Hard copy proof of claim is to be sent to: Hyflux Ltd, Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949.

4. The deadline for submission of the completed proof of claim (with relevant supporting documents) is 5.00p.m. on Friday, 1 March 2019.

5. I/We declare that to the best of my knowledge and belief, the Company owes the party set out in paragraph 1 above the amounts set out in paragraph

2 above.


Signature

……………………………………………......

4

NOTES:

1 A separate form for purpose of instructions on voting will be provided to the parties whose claims are admitted in relation to the Scheme Meeting(s).

2 By submitting this form, you represent, warrant and undertake to the Company and/or the Chairman of the Scheme Meeting(s) that any personal data of any individual

provided has been obtained with such individual’s consent and hereby consents on behalf of such individual to the collection, processing, use and disclosure of his/her

personal data by the Company and/or the Chairman of the Scheme Meeting(s) (and any of their respective officers), in each case, in accordance with the provisions of

the Singapore Personal Data Protection Act 2012 (No. 26 of 2012). Any consent given hereunder in relation to personal data shall survive death, incapacity, bankruptcyor insolvency of any such individual and the holding of the Scheme Meeting(s). For the purposes hereunder, "personal data" has the meaning ascribed to it in the

Singapore Personal Data Protection Act 2012 (No. 26 of 2012).

5

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYDROCHEM (S) PTE. LTD.

(Company Registration No. UEN No. 198902670Z)

(Incorporated in the Republic of Singapore on 30 June 1989)

(the "Company")






THIS FORM



Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any) #





S/N Date claim

arose ###

Payment due

date


Claimed

1.

2.

2

3.

4.

Total:













Signature:

……………………………………………......

3

NOTES:






Meeting(s).









4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYDROCHEM (S) PTE LTD


(Incorporated in the Republic of Singapore on 30 June 1989)

(the "Company")






Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

required) #

# Please indicate reference number to be quoted for future correspondence in relation to this matter with the Company, Chairman of the Scheme Meeting(s) and/or any

relevant representative or appointed person in relation to the Scheme Meeting(s).

2



(eg, date services

were contracted,

date work was

done, date goods


Payment due date



the claim is made

Amount claimed

1.

2.

3.

3

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing this form. The onus is upon the party claiming payment to prove the

amounts claimed. Failure to do so may result in the claim being rejected by the Chairman of the Scheme Meeting(s).

### Only claims arising prior to 22 May 2018 (regardless of invoice date or when payment is claimed) are to be listed in this this proof of claim (“Pre-Moratorium Claims”).



Hard copy proof of claim is to be sent to: Hydrochem (S) Pte. Ltd., Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949.



2 above.


Signature

……………………………………………......

4

NOTES:







5

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYFLUX MEMBRANE MANUFACTURING (S) PTE. LTD.

(Company Registration No. UEN No. 200702494M)

(Incorporated in the Republic of Singapore on 12 February 2007)

(the "Company")






THIS FORM



Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any) #

# Please indicate reference number to be quoted for future correspondence in relation to this

matter with the Company, Chairman of the Scheme Meeting(s) and/or any relevant

representative or appointed person in relation to the Scheme Meeting(s).


S/N Date claim

arose ###

Payment due

date


Claimed

1.

2.

2

3.

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing

this form. The onus is upon the party claiming payment to prove the amounts claimed. Failure

to do so may result in the claim being rejected by the Chairman of the Scheme Meeting(s).

### The amount claimed shall be for all claims against the Company as at 25 March 2019 (including

interest).









Signature:

……………………………………………......

3

NOTES:

1 A separate form for purpose of instructions on voting will be provided to the parties whose

claims are admitted in relation to the Scheme Meeting(s).

2 Please enclose or attach copies of documents substantiating the obligation claimed when filing

this form. The onus is upon the party claiming to be owed an obligation to prove the obligation

claimed. Failure to substantiate the obligations may result in the claim being rejected by the

Chairman of the Scheme Meeting(s).

3 By submitting this form, you represent, warrant and undertake to the Company and/or the

Chairman of the Scheme Meeting(s) that any personal data of any individual provided has been

obtained with such individual’s consent and hereby consents on behalf of such individual to the

collection, processing, use and disclosure of his/her personal data by the Company and/or the

Chairman of the Scheme Meeting(s) (and any of their respective officers), in each case, in

accordance with the provisions of the Singapore Personal Data Protection Act 2012 (No. 26 of

2012). Any consent given hereunder in relation to personal data shall survive death, incapacity,

bankruptcy or insolvency of any such individual and the holding of the Scheme Meeting(s). For

the purposes hereunder, "personal data" has the meaning ascribed to it in the Singapore

Personal Data Protection Act 2012 (No. 26 of 2012).

4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYFLUX MEMBRANE MANUFACTURING (S) PTE. LTD.

(Company Registration No. UEN No. 200702494M)

(Incorporated in the Republic of Singapore on 12 February 2007)

(the "Company")






Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

required) #



2



(eg, date services

were contracted,

date work was

done, date goods


Payment due date



the claim is made

Amount claimed

1.

2.

3.

3

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing this form. The onus is upon the party claiming payment to prove

the amounts claimed. Failure to do so may result in the claim being rejected by the Chairman of the Scheme Meeting(s).

### Only claims arising prior to 22 May 2018 (regardless of invoice date or when payment is claimed) are to be listed in this proof of claim (“Pre-Moratorium

Claims”). The amount(s) asserted in respect of the Pre-Moratorium Claims (including interest) should be calculated up to the cut-off date of 25 March 2019.





2 above.


Signature

……………………………………………......

4

NOTES:







5

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYFLUX ENGINEERING PTE LTD

(Company Registration No. 200009792D)

(Incorporated in the Republic of Singapore on 18 November 2000)

(the "Company")






THIS FORM



Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

any) #





S/N Date claim

arose ###

Payment due

date


Claimed

1.

2.

2

3.

4.

Total:













Signature:

……………………………………………......

3

NOTES:






Meeting(s).









4

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

1


HYFLUX ENGINEERING PTE LTD

(Company Registration No. 200009792D)

(Incorporated in the Republic of Singapore on 18 November 2000)

(the "Company")






Company/Business

registration number

Address Contact

number(s)

Email

address:

Reference

number (if

required) #



2



(eg, date services

were contracted,

date work was

done, date goods


Payment due date



the claim is made

Amount claimed

1.

2.

3.

3

4.

Total:

## Please enclose or attach copies of documents substantiating the amounts claimed when filing this form. The onus is upon the party claiming payment to prove

the amounts claimed. Failure to do so may result in the claim being rejected by the Chairman of the Scheme Meeting(s).

### Only claims arising prior to 22 May 2018 (regardless of invoice date or when payment is claimed) are to be listed in this proof of claim (“Pre-Moratorium Claims”).






2 above.


Signature

……………………………………………......

4

NOTES:







5

STAMP

PROOF OF CLAIM

NAME: ______________________________________

Hyflux Ltd


80 Bendemeer Road

Singapore 339949

Appendix E – Proxy Forms

HYFLUX LTD.



(the "Company")

PROXY FORM FOR SCHEME MEETING

TO BE USED ONLY BY BANK LENDERS (AS DEFINED HEREIN)

Note: Please refer to the Company's notice of a scheme meeting ("Scheme Meeting") of the banks and

other financial institutions who are lenders to Hyflux Ltd of the Facilities to be held at Hyflux Innovation

Centre, 80 Bendemeer Road, Singapore 339949 (or such other place as may be notified by

announcement on SGXNet) on 5 April 2019 at 12 noon and at any adjournment thereof, for the purpose

of considering and, if thought fit, approving (with or without modification) the scheme of arrangement

(the "Scheme") referred to in the said notice convening the Scheme Meeting.

(This form is to be completed only by a Bank Lender, which includes all Facilities Lenders and KfW.

See Note 1 below.)

Capitalised terms used herein but not defined shall have the meanings given to them in the Notice of

Scheme Meeting dated 22 February 2019.

DETAILS OF BANK LENDER

We, the undersigned, being a holder of the Facilities debt owed by the Company under the

_____________________________________________________ [describe name of facility

agreement/letter of offer etc] dated ______________________________ [date of facility

agreement/letter of offer etc] entered into between [among others ][delete for bilateral facilities]

ourselves, as lender and the Company, [as borrower], hereby appoint the following as our proxy (the

“Proxy”) to attend the Scheme Meeting or any adjournment thereof:

(See Note 2)

DETAILS OF PROXY

(Note: You can appoint only one proxy. If you leave this section blank, the Chairman of the Scheme

Meeting will act as your proxy)

Name Address NRIC / Passport No. ^

or failing *him/her, the Chairman of the Scheme Meeting ("Chairman"), as our proxy to attend and to

vote for us on our behalf at the Scheme Meeting, and at such Scheme Meeting (or at any adjournment

thereof) to vote for us and in our name(s) as indicated below, and if no such indication is given, as our

proxy thinks fit.

^ The Proxy is to present his/her passport (if he/she is not a Singapore citizen) or Singapore National

Registration Identity Card (if he/she is a Singapore citizen or a Singapore permanent resident holding a

blue Singapore National Registration Identity Card) immediately prior to the Scheme Meeting to gain entry

to the Scheme Meeting

2

We acknowledge that the appointment of such Proxy is (subject to Notes 3 and 9 below) neither

revocable nor subject to amendments after 12 noon (Singapore time) on 2 April 2019, which is the

Expiration Time (as defined in Note 6 below).

VOTE

The Proxy is authorised only to vote on our behalf in favour of (“FOR”) or against (“AGAINST”) the

Scheme as hereunder indicated (by a √ mark).

Note: If you leave both boxes blank, your proxy will have complete discretion as to how to vote on your

behalf and such vote, once cast by your proxy, will be binding on you. Where your proxy is the Chairman

and you leave both boxes blank, such vote will be cast FOR the Scheme (for the avoidance of doubt, if

the Chairman is your proxy and you have voted AGAINST the Scheme, such vote will be cast AGAINST

the Scheme). DO NOT TICK IN BOTH BOXES AS THIS WILL INVALIDATE YOUR VOTE.

FOR (Please indicate with a tick ()) OR AGAINST (Please indicate with a tick ())

3

Notes to Proxy Form:

1 This form is to be completed only by Bank Lender. A “Bank Lender” is a bank or other financial institution

that has granted Facilities to the Company under a club or syndicated facilities agreement, and KfW. Each

such bank or financial institution should complete this form individually.

2 A Bank Lender may only appoint a natural person or the Chairman as a proxy, and may only appoint one

such person or the Chairman as a proxy.

3 The appointment of a proxy does not preclude the Bank Lender from attending and voting at the Scheme

Meeting. If a Bank Lender attends the Scheme Meeting in person, its proxy appointment shall be deemed

to be revoked, and the Chairman reserves the right to refuse to admit such proxy to the Scheme Meeting.

4 A Bank Lender may authorise by resolution of its directors or other governing body such person as it

thinks fit to act as its representative in accordance with its constitutional documents or may under its

constitutional documents grant a power of attorney to such person as it thinks fit powers to act as its

representative or may have in force a standing authorisation under a pre-existing power of attorney.

Attendance by any such representative will be considered as attendance by the Bank Lender in person.

5 Any alteration made in this Proxy Form must be initialled by each signatory of the appointor who executes

this Proxy Form.

6 This Proxy Form (together with the power of attorney or board resolution (or a certified copy thereof), if

any, under which it is signed), must be deposited at the office of the Company’s meeting agent, BoardroomCorporate & Advisory Services Pte. Ltd. (the "Meeting Agent"), at 50 Raffles Place #32-01 Singapore

Land Tower, Singapore 048623, not less than 72 hours before the time appointed for holding the SchemeMeeting (the “Expiration Time”).

7 This Proxy Form must (a) have the common seal of the appointor affixed hereto, (b) be executed under

section 41B of the Companies Act, (c) be executed under the hand and personal seal (as indicated below)

of the appointor’s duly authorised attorney, or (d) (if the appointor is not a company incorporated in

Singapore) be properly executed as a deed in accordance with the laws of its jurisdiction of incorporation.

If the appointor does not have a common seal, this Proxy Form must be executed in the manner set out

in the appointor’s constitutional documents or the relevant legislation for the execution of documents as a

deed. Where this Proxy Form is executed by the appointor’s duly authorised attorney, sufficient evidence

of the attorney’s due authority must accompany this Proxy Form and be deposited herewith before the

time stipulated at Note 6 above.

8 The Chairman shall be entitled to reject this Proxy Form if it is incomplete, improperly completed,

unexecuted or improperly executed, illegible, or where in the Chairman’s opinion the true intentions of the

appointor are not ascertainable from the instructions of the appointor specified in this Proxy Form, or if

this Proxy Form is not received by the Meeting Agent within the time specified in or in accordance with

Note 6 above.

9 A Bank Lender who has already submitted a Proxy Form to the Meeting Agent may only subsequently

revoke (subject to the revocation of proxy set out in Note 3 above) or amend such Proxy Form by

submitting a new Proxy Form to the Meeting Agent not later than the Expiration Time. In that case, the

Meeting Agent shall disregard the previous Proxy Form(s) and refer only to the last Proxy Form received.

10 Bank Lenders who submit this Proxy Form represent, warrant and undertake to the Company, the Meeting

Agent and the Chairman that any personal data of any individual provided has been obtained with such


and disclosure of his/her personal data by the Company, the Chairman or the Meeting Agent (and any of

their respective officers, employees or advisers), in each case, in accordance with the terms of the

Scheme and the provisions of the Singapore Personal Data Protection Act 2012 (No. 26 of 2012). Any

consent given hereunder in relation to personal data shall survive death, incapacity, bankruptcy or

insolvency of any such individual and the termination or expiration of the Scheme. For the purposeshereunder, "personal data" has the meaning ascribed to it in the Singapore Personal Data Protection Act

2012 (No. 26 of 2012).

4


EITHER [to be used where executed under common seal of the appointor]

The COMMON SEAL of )

[the Bank Lender] )

was hereunto affixed )

in the presence of: )

_________________________________

Director

Name: [Name of Director]

_________________________________

Director/Secretary

Name: [Name of Director/Secretary]

OR [to be used where executed under section 41B of the Companies Act]

Executed as a deed by )

[the Bank Lender] )

in accordance with )

Section 41B of the Companies Act (Cap. 50) )

______________________________________

Director


______________________________________

Director/Secretary/Witness

Name: [Name of Director/Secretary/Witness]

OR [to be used where executed under the hand and personal seal of the appointor’s duly authorised

attorney]

SIGNED, SEALED and DELIVERED )

by [attorney name] )

as attorney acting on behalf of ) ……………………………

[the Bank Lender] )


……………………………………………......

[name of witness]* Execution block to be in accordance with the laws of the jurisdiction of incorporation of the Bank Lender.

HYFLUX LTD.



(the "Company")


TO BE USED ONLY BY CONTINGENT CLAIMANTS OR OTHER CLAIMANTS

Note: Please refer to the Company's notice of a scheme meeting ("Scheme Meeting") of the Contingent

Claimants of Hyflux Ltd to be held at Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949

(or such other place as may be notified by announcement on SGXNet) on 5 April 2019 at 12 noon and

at any adjournment thereof, for the purpose of considering and, if thought fit, approving (with or without

modification) the scheme of arrangement (the "Scheme") referred to in the said notice convening the

Scheme Meeting.

(This form is to be completed only by a Contingent Claimant OR Other Claimant. See Note 1 below.)



DETAILS OF CONTINGENT CLAIMANT OR OTHER CLAIMANT

We, the undersigned, being a Contingent Claimant of the Company under the

_____________________________________________________ [describe name of facility

agreement/letter of offer/guarantee/letter of credit/other contract etc] dated

______________________________ [date of facility agreement/letter of offer/guarantee/letter of

credit/other contract etc] entered into between [among others ][delete for bilateral facilities] ourselves,

as lender and the Company, as [guarantor/applicant/borrower], hereby appoint the following as our

proxy (the “Proxy”) to attend the Scheme Meeting or any adjournment thereof:

(See Note 2)

DETAILS OF PROXY







proxy thinks fit.





2




VOTE









3


1 This form is to be completed only by a Contingent Claimant or Other Claimant. Where a Contingent

Claimant or Other Claimant is a bank or other financial institution that has granted Facilities (from which

the Contingent Claim or Other Claim arises) to the Company under a club or syndicated facilities

agreement, and each such bank or financial institution should complete this form individually.

2 A Contingent Claimant or Other Claimant may only appoint a natural person or the Chairman as a proxy,

and may only appoint one such person or the Chairman as a proxy.

3 The appointment of a proxy does not preclude the Contingent Claimant from attending and voting at the

Scheme Meeting. If a Contingent Claimant or Other Claimant attends the Scheme Meeting in person, its

proxy appointment shall be deemed to be revoked, and the Chairman reserves the right to refuse to admit

such proxy to the Scheme Meeting.

4 A Contingent Claimant or Other Claimant may authorise by resolution of its directors or other governing

body such person as it thinks fit to act as its representative in accordance with its constitutional documents

or may under its constitutional documents grant a power of attorney to such person as it thinks fit powers

to act as its representative or may have in force a standing authorisation under a pre-existing power of

attorney. Attendance by any such representative will be considered as attendance by the Contingent

Claimant or Other Claimant in person.


this Proxy Form.




7 This Proxy Form must (a) have the common seal of the appointor affixed hereto, (b) be executed under

section 41B of the Companies Act, (c) be executed under the hand and personal seal (as indicated below)

of the appointor’s duly authorised attorney, or (d) (if the appointor is not a company incorporated in

Singapore) be properly executed as a deed in accordance with the laws of its jurisdiction of incorporation.

If the appointor does not have a common seal, this Proxy Form must be executed in the manner set out

in the appointor’s constitutional documents or the relevant legislation for the execution of documents as a

deed. Where this Proxy Form is executed by the appointor’s duly authorised attorney, sufficient evidence

of the attorney’s due authority must accompany this Proxy Form and be deposited herewith before the

time stipulated at Note 6 above.



appointor are not ascertainable from the instructions of the appointor specified in this Proxy Form or if this

Proxy Form is not received by the Meeting Agent within the time specified in or in accordance with Note

6 above.

9 A Contingent Claimant or Other Claimant who has already submitted a Proxy Form to the Meeting Agent

may only subsequently revoke (subject to the revocation of proxy set out in Note 3 above) or amend such

Proxy Form by submitting a new Proxy Form to the Meeting Agent not later than the Expiration Time. In

that case, the Meeting Agent shall disregard the previous Proxy Form(s) and refer only to the last Proxy

Form received.

10 Contingent Claimants or Other Claimants who submit this Proxy Form represent, warrant and undertake

to the Company, the Meeting Agent and the Chairman that any personal data of any individual provided

has been obtained with such individual’s consent and hereby consents on behalf of such individual to the

collection, processing, use and disclosure of his/her personal data by the Company, the Chairman or the

Meeting Agent (and any of their respective officers, employees or advisers), in each case, in accordance

with the terms of the Scheme and the provisions of the Singapore Personal Data Protection Act 2012 (No.

26 of 2012). Any consent given hereunder in relation to personal data shall survive death, incapacity,

bankruptcy or insolvency of any such individual and the termination or expiration of the Scheme. For the

4

purposes hereunder, "personal data" has the meaning ascribed to it in the Singapore Personal Data

Protection Act 2012 (No. 26 of 2012).

5


EITHER [to be used where executed under common seal of the appointor]

The COMMON SEAL of )

[the Contingent Claimant or Other Claimant] )

was hereunto affixed )


_________________________________

Director


_________________________________

Director/Secretary

Name: [Name of Director/Secretary]

OR [to be used where executed under section 41B of the Companies Act]

Executed as a deed by )


in accordance with )

Section 41B of the Companies Act (Cap. 50) )

______________________________________

Director


______________________________________

Director/Secretary/Witness

Name: [Name of Director/Secretary/Witness]

OR [to be used where executed under the hand and personal seal of the appointor’s duly authorised

attorney]

SIGNED, SEALED and DELIVERED )

by [attorney name] )

as attorney acting on behalf of ) ……………………………



……………………………………………......

[name of witness]* Execution block to be in accordance with the laws of the jurisdiction of incorporation of the Contingent Claimant or Other Claimant.

HYFLUX LTD.

(UEN: 200002722Z)


(the "Company")


TO BE USED ONLY BY

DEPOSITORS (AS REFLECTED IN THE CDP'S DEPOSITORY REGISTER)

HOLDING THE FOLLOWING SECURITIES OF THE COMPANY:

(1) S$100,000,000 4.25% NOTES DUE 2018 COMPRISED IN SERIES 008 (ISIN:

SG6Q70974010); AND/OR


SG6Q77974112); AND/OR


SG6W23985057)

(COLLECTIVELY, THE "NOTES")

Note: Please refer to the Company's notice of a scheme meeting ("Scheme Meeting") to be convened

in relation to the above-mentioned securities, to be held at Hyflux Innovation Centre, 80 Bendemeer

Road, Singapore 339949 (or such other place as may be notified by announcement on SGXNet) on 5

April 2019 at 12 noon and at any adjournment thereof, for the purpose of considering and, if thought fit,

approving (with or without modification) the scheme of arrangement (the "Scheme") referred to in the

said notice convening the Scheme Meeting.

Important:

1. This Proxy Form is only valid for use if you are a depositor (as defined in Section 81SF of the Securities andFutures Act (Chapter 289 of Singapore) ("SFA"), which excludes a sub-account holder) who has Notes entered

against your name in the Depository Register (as defined in Section 81SF of the SFA) of The CentralDepository (Pte) Limited ("CDP") as at 72 hours before the time appointed for holding the Scheme Meeting.

For the purposes of this form, such person is referred to as a "CDP Account Holder".

2. If you are not a CDP Account Holder, please do not use this Proxy Form. If you hold your interest in Notes

through a Relevant Intermediary and wish to attend and vote at the Scheme Meeting (as defined in Section

181 of the Companies Act (Chapter 50 of Singapore); see Note 1 below), you need to separately contact and

instruct such Relevant Intermediary to appoint you as its proxy.

3. If you are a CDP Account Holder who is not a Relevant Intermediary, please complete Parts A and B of this

form. You do not need to complete Part C.

4. If you are a CDP Account Holder who is a Relevant Intermediary, please complete Parts A and C of this

form. You do not need to complete Part B.

PART A

DETAILS OF CDP ACCOUNT HOLDER

*delete accordingly

*I/We ___________________________________(Name) _____________________(NRIC/Passport

No./UEN/Company Registration No.) of ________________________________________ (Address)

being a holder(s) of Notes as shown in the CDP Depository Register, hereby appoint the following-

named person:

DETAILS OF PROXY

(Note: You can appoint only one proxy unless you are a Relevant Intermediary. For Relevant

Intermediaries, please refer to Note 2 below for further instructions. If you leave this section blank, the

Chairman of the Scheme Meeting will act as your proxy.)


or failing *him/her, the Chairman of the Scheme Meeting ("Chairman"), as *my/our proxy to attend and

to vote for *me/us on my/our behalf at the Scheme Meeting, and at such Scheme Meeting (or at any

adjournment thereof) to vote for *me/us and in *my/our name(s) as indicated below, and if no such

indication is given, as my/our* proxy thinks fit.





*I/We acknowledge that the appointment of such Proxy is (subject to Notes 1 and 8 below) neither



PART B

TO BE COMPLETED BY ALL CDP ACCOUNT HOLDERS (WHO ARE NOT RELEVANT

INTERMEDIARIES)

(Note: Please leave this section blank if you are a Relevant Intermediary.)

Note: If you wish to exercise your votes "FOR" or "AGAINST" the Scheme, please indicate with a tick

() within the relevant box below. If you leave both boxes blank, your proxy will have complete discretion

as to how to vote on your behalf and such vote, once cast by your proxy, will be binding on you. Where

your proxy is the Chairman, and you leave both boxes blank, such vote will be cast FOR the Scheme

(for the avoidance of doubt, if the Chairman is your proxy and you have voted AGAINST the Scheme,

such vote will be cast AGAINST the Scheme). DO NOT TICK IN BOTH BOXES AS THIS WILL

INVALIDATE YOUR VOTE.


PART C

TO BE COMPLETED BY RELEVANT INTERMEDIARIES ONLY

(Note: Please leave this section blank if you are not a Relevant Intermediary, otherwise any information

inserted in this section will be disregarded. For Relevant Intermediaries that wish to appoint more than

one proxy, please refer to Note 2 below for further instructions and leave the below table blank.)

Please indicate the value of the Notes which you wish to vote each of "FOR" and "AGAINST" in each

box as appropriate. If you leave both boxes blank, your proxy will have complete discretion as to how

to vote on your behalf and such vote, once cast by your proxy, will be binding on you. Where your proxy

is the Chairman, and you leave both boxes blank, your entire vote will be cast FOR the Scheme (for the

avoidance of doubt, if the Chairman is your proxy and you have voted AGAINST the Scheme, such vote

will be cast AGAINST the Scheme).

FOR (Please indicate value)

Notes (state only principal amount):

AGAINST (Please indicate value)

Notes (state only principal amount):

Dated this day of ___________ day of ______________2019

______________________________________

Signature(s) of CDP Account Holder or Common Seal

Important: Please read notes overleaf carefully before completing this form.


1. A CDP Account Holder who is not a Relevant Intermediary (as defined below) entitled to attend and vote at

the Scheme Meeting is entitled to appoint only one (and not more than one) proxy to attend and vote instead

of him. A proxy need not be a CDP Account Holder. The appointment of a proxy by this Proxy Form shall not

preclude a CDP Account Holder from attending and voting in person at the Scheme Meeting. If a CDP Account

Holder attends the Scheme Meeting in person, his proxy appointment shall be deemed to be revoked, and the

Chairman reserves the right to refuse to admit such proxy to the Scheme Meeting.

"Relevant intermediary" as defined under Section 181 of the Companies Act (Chapter 50 of Singapore)

means:

(a) a banking corporation licensed under the Banking Act (Chapter 19 of Singapore) or a wholly-owned

subsidiary of such a banking corporation, whose business includes the provision of nominee services

and who holds shares in that capacity;

(b) a person holding a capital markets services licence to provide custodial services under the Securities

and Futures Act (Chapter 289 of Singapore) and who holds shares in that capacity; or(c) the Central Provident Fund Board ("CPF Board") established by the Central Provident Fund Act (Chapter

36 of Singapore), in respect of shares purchased under the subsidiary legislation made under that Act

providing for the making of investments from the contributions and interest standing to the credit of

members of the Central Provident Fund, if the CPF Board holds those shares in the capacity of an

intermediary pursuant to or in accordance with that subsidiary legislation.

2. A CDP Account Holder who is a Relevant Intermediary is entitled to appoint more than one proxy to attend

and vote at the Scheme Meeting instead of him, provided that each proxy (a) is a sub-account holder on whose

behalf such Relevant Intermediary holds Notes, and (b) is appointed to exercise the voting rights attached to

a different Note or Notes held by such Relevant Intermediary on his behalf. In relation to a Relevant

Intermediary who wishes to appoint more than one proxy, it should annex to this Proxy Form a full list of all of

the sub-account holders on whose behalf such Relevant Intermediary holds Notes, setting out in respect of

each proxy, the full name, address, NRIC/Passport Number/UEN/Company Registration Number and

proportion of the value of the Notes (in principal amount for Notes) in relation to which each such proxy has

been appointed.

3. This Proxy Form must be executed under the hand of the appointor or his attorney duly authorised in writing

or, where the Proxy Form is executed by a corporation, it must be executed either under its seal or under the

hand of an officer or attorney duly authorised. Any alteration made to the Proxy Form should be initialled by

each signatory of the person who signs this Proxy Form.

4. Each CDP Account Holder who is not a Relevant Intermediary and is entitled to attend and vote at the Scheme

Meeting, and who votes in person or by proxy at the Scheme Meeting may only cast all the votes it uses at the

Scheme Meeting in one way, namely either for or against.

5. This Proxy Form (together with the power of attorney or board resolution (or a certified copy thereof), if any,

under which it is signed), must be deposited at the office of the Company’s meeting agent, BoardroomCorporate & Advisory Services Pte. Ltd. (the "Meeting Agent"), at 50 Raffles Place #32-01 Singapore Land

Tower, Singapore 048623, not less than 72 hours before the time appointed for holding the Scheme Meeting(the "Expiration Time").

6. In the case of joint holders of Notes, any one of such persons may vote, but if more than one of such persons

be present at the Scheme Meeting, the person whose name stands first on the Depository Register shall alone

be entitled to vote.

7. The Chairman shall be entitled to reject this Proxy Form if it is incomplete, improperly completed, unexecuted

or improperly executed, illegible, or where in the Chairman’s opinion the true intentions of the appointor are

not ascertainable from the instructions of the appointor specified in this Proxy Form or if this Proxy Form is not

received by the Meeting Agent prior to the Expiration Time.

8. A CDP Account Holder who has already submitted a Proxy Form to the Meeting Agent may only subsequently

revoke (subject to the revocation of proxy set out in Note 1 above) or amend such Proxy Form by submitting

a new Proxy Form to the Meeting Agent not later than the Expiration Time. In that case, the Meeting Agent

shall disregard the previous Proxy Form(s) and refer only to the last Proxy Form received.

9. The Chairman may reject any Proxy Form lodged if: (a) the CDP Account Holder, being the appointor, is not

shown to have Notes entered against his name as an account holder or sub-account holder in the Depository

Register as certified by CDP; or (b) the proxy of a Relevant Intermediary is not shown to have Notes entered

against his name as a sub-account holder in such documentary evidence as may be required to be provided

by the respective Relevant Intermediary at the discretion of the Chairman, as at 72 hours before the time

appointed for holding the Scheme Meeting.

10. A CDP Account Holder who submits this Proxy Form represents, warrants and undertakes to the Company,

the Chairman and the Meeting Agent that any personal data of any individual provided has been obtained with

such individual’s consent and hereby consents on behalf of such individual to the collection, processing, use

and disclosure of his/her personal data by the Company, the Chairman or the Meeting Agent (and any of their

respective officers, employees or advisers), in each case, in accordance with the terms of the Scheme and

the provisions of the Singapore Personal Data Protection Act 2012 (No. 26 of 2012). Any consent given

hereunder in relation to personal data shall survive death, incapacity, bankruptcy or insolvency of any suchindividual and the termination or expiration of the Scheme. For the purposes hereunder, "personal data" has

the meaning ascribed to it in the Singapore Personal Data Protection Act 2012 (No. 26 of 2012).

HYFLUX LTD.(UEN: 200002722Z)

(Incorporated in the Republic of Singapore on 31 March 2000)(the "Company")


TO BE USED ONLY BY

DEPOSITORS (AS REFLECTED IN THE CDP'S DEPOSITORY REGISTER)

HOLDING THE FOLLOWING SECURITIES OF THE COMPANY:

(1) S$500,000,000 6.00% PERPETUAL CAPITAL SECURITIES (SGX:BTWZ) (THE

"PERPETUAL CAPITAL SECURITIES"); AND/OR

(2) S$400,000,000 8.00% CUMULATIVE NON-CONVERTIBLE NON-VOTING PERPETUAL

CLASS A PREFERENCE SHARES (SGX:N2H) (THE "PREFERENCE SHARES")

Note: Please refer to the Company's notice of a scheme meeting ("Scheme Meeting") to be convened

in relation to the above-mentioned securities, to be held at Hyflux Innovation Centre, 80 Bendemeer

Road, Singapore 339949 (or such other place as may be notified by announcement on SGXNet) on 5

April 2019 at 7.00 p.m. and at any adjournment thereof, for the purpose of considering and, if thought

fit, approving (with or without modification) the scheme of arrangement (the "Scheme") referred to in

the said notice convening the Scheme Meeting.

Important:

1. This Proxy Form is only valid for use if you are a depositor (as defined in Section 81SF of the Securities andFutures Act (Chapter 289 of Singapore) ("SFA"), which excludes a sub-account holder) who has Perpetual

Capital Securities and/or Preference Shares (collectively, "P&P Securities") entered against your name in the

Depository Register (as defined in Section 81SF of the SFA) of The Central Depository (Pte) Limited ("CDP")

as at 72 hours before the time appointed for holding the Scheme Meeting. For the purposes of this form, suchperson is referred to as a "CDP Account Holder".

2. If you are not a CDP Account Holder, please do not use this Proxy Form. If you hold your interest in P&P

Securities through a Relevant Intermediary and wish to attend and vote at the Scheme Meeting (as defined in

Section 181 of the Companies Act (Chapter 50 of Singapore); see Note 1 below), you need to separately

contact and instruct such Relevant Intermediary to appoint you as its proxy. This category would include

persons who invested in the P&P Securities through a bank, custodian, nominee, broker or other depository

or with their CPF or SRS funds.

3. If you are a CDP Account Holder who is not a Relevant Intermediary, please complete Parts A and B of this

form. You do not need to complete Part C.

4. If you are a CDP Account Holder who is a Relevant Intermediary, please complete Parts A and C of this form.

You do not need to complete Part B.

PART A

DETAILS OF CDP ACCOUNT HOLDER

*delete accordingly

*I/We ___________________________________(Name) _____________________(NRIC/Passport

No./UEN/Company Registration No.) of ________________________________________ (Address)

being a holder(s) of Perpetual Capital Securities and/or Preference Shares as shown in the CDP

Depository Register, hereby appoint the following-named person:

DETAILS OF PROXY

(Note: You can appoint only one proxy unless you are a Relevant Intermediary. For Relevant

Intermediaries, please refer to Note 2 below for further instructions. If you leave this section blank, the

Chairman of the Scheme Meeting will act as your proxy.)

Name Address NRIC / Passport No.

or failing *him/her, the Chairman of the Scheme Meeting ("Chairman"), as *my/our proxy to attend and

to vote for *me/us on my/our behalf at the Scheme Meeting, and at such Scheme Meeting (or at any

adjournment thereof) to vote for *me/us and in *my/our name(s) as indicated below, and if no such

indication is given, as my/our* proxy thinks fit.





*I/We acknowledge that the appointment of such Proxy is (subject to Notes 1 and 8 below) neither

revocable nor subject to amendments after 7 p.m. (Singapore time) on 2 April 2019, which is the


PART B

TO BE COMPLETED BY ALL CDP ACCOUNT HOLDERS

(WHO ARE NOT RELEVANT INTERMEDIARIES)

(Note: Please leave this section blank if you are a Relevant Intermediary.)

Note: If you wish to exercise your votes "FOR" or "AGAINST" the Scheme, please indicate with a tick

() within the relevant box below. If you leave both boxes blank, your proxy will have complete discretion

as to how to vote on your behalf and such vote, once cast by your proxy, will be binding on you. Where

your proxy is the Chairman, and you leave both boxes blank, such vote will be cast FOR the Scheme

(for the avoidance of doubt, if the Chairman is your proxy and you have voted AGAINST the Scheme,

such vote will be cast AGAINST the Scheme). DO NOT TICK IN BOTH BOXES AS THIS WILL

INVALIDATE YOUR VOTE.


PART C

TO BE COMPLETED BY RELEVANT INTERMEDIARIES ONLY

(Note: Please leave this section blank if you are not a Relevant Intermediary, otherwise any information

inserted in this section will be disregarded. For Relevant Intermediaries that wish to appoint more than

one proxy, please refer to Note 2 below for further instructions and leave the below table blank.)

Please indicate the value of the P&P Securities which you wish to vote each of "FOR" and "AGAINST"

in each box as appropriate. If you leave both boxes blank, your proxy will have complete discretion as

to how to vote on your behalf and such vote, once cast by your proxy, will be binding on you. Where

your proxy is the Chairman, and you leave both boxes blank, your entire vote will be cast FOR the

Scheme (for the avoidance of doubt, if the Chairman is your proxy and you have voted AGAINST the

Scheme, such vote will be cast AGAINST the Scheme).

FOR (Please indicate value)

Perpetual Capital Securities (state only

principal amount):

Preference Shares (state only number of

shares):

AGAINST (Please indicate value)

Perpetual Capital Securities (state only principal

amount):

Preference Shares (state only number of

shares):


______________________________________

Signature(s) of CDP Account Holder or Common Seal



1. A CDP Account Holder who is not a Relevant Intermediary (as defined below) entitled to attend and vote at

the Scheme Meeting is entitled to appoint only one (and not more than one) proxy to attend and vote instead

of him. A proxy need not be a CDP Account Holder. The appointment of a proxy by this Proxy Form shall not

preclude a CDP Account Holder from attending and voting in person at the Scheme Meeting. If a CDP Account

Holder attends the Scheme Meeting in person, his proxy appointment shall be deemed to be revoked, and the

Chairman reserves the right to refuse to admit such proxy to the Scheme Meeting.

"Relevant intermediary" as defined under Section 181 of the Companies Act (Chapter 50 of Singapore)

means:

(a) a banking corporation licensed under the Banking Act (Chapter 19 of Singapore) or a wholly-owned

subsidiary of such a banking corporation, whose business includes the provision of nominee services

and who holds shares in that capacity;

(b) a person holding a capital markets services licence to provide custodial services under the Securities

and Futures Act (Chapter 289 of Singapore) and who holds shares in that capacity; or(c) the Central Provident Fund Board ("CPF Board") established by the Central Provident Fund Act (Chapter

36 of Singapore), in respect of shares purchased under the subsidiary legislation made under that Act

providing for the making of investments from the contributions and interest standing to the credit of

members of the Central Provident Fund, if the CPF Board holds those shares in the capacity of an

intermediary pursuant to or in accordance with that subsidiary legislation.

2. A CDP Account Holder who is a Relevant Intermediary is entitled to appoint more than one proxy to attend

and vote at the Scheme Meeting instead of him, provided that each proxy (a) is a sub-account holder on whose

behalf such Relevant Intermediary holds P&P Securities, and (b) is appointed to exercise the voting rights

attached to a different P&P Security or P&P Securities held by such Relevant Intermediary on his behalf. In

relation to a Relevant Intermediary who wishes to appoint more than one proxy, it should annex to this Proxy

Form a full list of all of the sub-account holders on whose behalf such Relevant Intermediary holds P&P

Securities, setting out in respect of each proxy, the full name, address, NRIC/Passport Number/UEN/Company

Registration Number and proportion of the value of the P&P Securities (in principal amount for Perpetual

Capital Securities and number of shares for Preference Shares) in relation to which each such proxy has been

appointed.

3. This Proxy Form must be executed under the hand of the appointor or his attorney duly authorised in writing

or, where the Proxy Form is executed by a corporation, it must be executed either under its seal or under the

hand of an officer or attorney duly authorised. Any alteration made to the Proxy Form should be initialled by

each signatory of the person who signs this Proxy Form.

4. Each CDP Account Holder who is not a Relevant Intermediary and is entitled to attend and vote at the Scheme

Meeting, and who votes in person or by proxy at the Scheme Meeting may only cast all the votes it uses at the

Scheme Meeting in one way, namely either for or against.

5. This Proxy Form (together with the power of attorney or board resolution (or a certified copy thereof), if any,

under which it is signed), must be deposited at the office of the Company’s meeting agent, BoardroomCorporate & Advisory Services Pte. Ltd. (the "Meeting Agent"), at 50 Raffles Place #32-01 Singapore Land

Tower, Singapore 048623, not less than 72 hours before the time appointed for holding the Scheme Meeting(the "Expiration Time").

6. In the case of joint holders of P&P Securities, any one of such persons may vote, but if more than one of such

persons be present at the Scheme Meeting, the person whose name stands first on the Depository Register

shall alone be entitled to vote.

7. The Chairman shall be entitled to reject this Proxy Form if it is incomplete, improperly completed, unexecuted

or improperly executed, or illegible, or where in the Chairman’s opinion the true intentions of the appointor are

not ascertainable from the instructions of the appointor specified in this Proxy Form or if this Proxy Form is not

received by the Meeting Agent prior to the Expiration Time.

8. A CDP Account Holder who has already submitted a Proxy Form to the Meeting Agent may only subsequently

revoke (subject to the revocation of proxy set out in Note 1 above) or amend such Proxy Form by submitting

a new Proxy Form to the Meeting Agent not later than the Expiration Time. In that case, the Meeting Agent

shall disregard the previous Proxy Form(s) and refer only to the last Proxy Form received.

9. The Chairman may reject any Proxy Form lodged if: (a) the CDP Account Holder, being the appointor, is not

shown to have P&P Securities entered against his name as an account holder or sub-account holder in the

Depository Register as certified by CDP; or (b) the proxy of a Relevant Intermediary is not shown to have P&P

Securities entered against his name as a sub-account holder in such documentary evidence as may be

required to be provided by the respective Relevant Intermediary at the discretion of the Chairman, as at 72

hours before the time appointed for holding the Scheme Meeting.

10. A CDP Account Holder who submits this Proxy Form represents, warrants and undertakes to the Company,

the Chairman and the Meeting Agent that any personal data of any individual provided has been obtained with

such individual’s consent and hereby consents on behalf of such individual to the collection, processing, use

and disclosure of his/her personal data by the Company, the Chairman or the Meeting Agent (and any of their

respective officers, employees or advisers), in each case, in accordance with the terms of the Scheme and

the provisions of the Singapore Personal Data Protection Act 2012 (No. 26 of 2012). Any consent given

hereunder in relation to personal data shall survive death, incapacity, bankruptcy or insolvency of any suchindividual and the termination or expiration of the Scheme. For the purposes hereunder, "personal data" has

the meaning ascribed to it in the Singapore Personal Data Protection Act 2012 (No. 26 of 2012).

HYFLUX LTD.



(the "Company")


TO BE USED ONLY BY TRADE CREDITORS

Note: Please refer to the Company's notice of a scheme meeting ("Scheme Meeting") of the trade

creditors of the Company to be held at Hyflux Innovation Centre, 80 Bendemeer Road, Singapore

339949 (or such other place as may be notified by announcement on SGXNet) on 5 April 2019 at 12

noon and at any adjournment thereof, for the purpose of considering and, if thought fit, approving (with

or without modification) the scheme of arrangement (the "Scheme") referred to in the said notice

convening the Scheme Meeting.

(This form is to be completed only by a trade creditor of the Company. See Note 1 below.)



DETAILS OF TRADE CREDITORS

We, the undersigned, being a trade creditor of the Company in relation to

_________________________________________________________________________________

[describe relevant contract(s), project, services, work done etc.] dated

______________________________ [date of contract, date work or services performed, date goods

were delivered etc], hereby appoint the following as our proxy (the “Proxy”) to attend the Scheme

Meeting or any adjournment thereof:

(See Note 2)

DETAILS OF PROXY







proxy thinks fit.








2

VOTE










______________________________________

Signature(s) or Common Seal


3


1 This form is to be completed only by a trade creditor of the Company. A trade creditor includes any person

or corporation that has supplied services and/or goods to the Company.

2 A trade creditor may only appoint a natural person or the Chairman as a proxy, and may only appoint one

such person or the Chairman as a proxy.

3 The appointment of a proxy does not preclude the trade creditor from attending and voting at the Scheme

Meeting. If a trade creditor attends the Scheme Meeting in person, its proxy appointment shall be deemed

to be revoked, and the Chairman reserves the right to refuse to admit such proxy to the Scheme Meeting.

4 A trade creditor may authorise by resolution of its directors or other governing body such person as it

thinks fit to act as its representative in accordance with its constitutional documents or may under its

constitutional documents grant a power of attorney to such person as it thinks fit powers to act as its

representative or may have in force a standing authorisation under a pre-existing power of attorney.

Attendance by any such representative will be considered as attendance by the trade creditor in person.


this Proxy Form.




7 This Proxy Form must be executed under the hand of the appointor or his attorney duly authorised in

writing or, where the Proxy Form is executed by a corporation, it must be executed either under its seal

or under the hand of an officer or attorney duly authorised. Any alteration made to the Proxy Form should

be initialled by each signatory of the person who signs this Proxy Form.



appointor are not ascertainable from the instructions of the appointor specified in this Proxy Form, or if

this Proxy Form is not received by the Meeting Agent prior to the Expiration Time.

9 A trade creditor who has already submitted a Proxy Form to the Meeting Agent may only subsequently

revoke (subject to the revocation of proxy set out in Note 3 above) or amend such Proxy Form by

submitting a new Proxy Form to the Meeting Agent not later than the Expiration Time. In that case, the

Meeting Agent shall disregard the previous Proxy Form(s) and refer only to the last Proxy Form received.

10 Trade creditors who submit this Proxy Form represent, warrant and undertake to the Company, the

Meeting Agent and the Chairman that any personal data of any individual provided has been obtained

with such individual’s consent and hereby consents on behalf of such individual to the collection,

processing, use and disclosure of his/her personal data by the Company, the Chairman or the Meeting

Agent (and any of their respective officers, employees or advisers), in each case, in accordance with the

terms of the Scheme and the provisions of the Singapore Personal Data Protection Act 2012 (No. 26 of

2012). Any consent given hereunder in relation to personal data shall survive death, incapacity,

bankruptcy or insolvency of any such individual and the termination or expiration of the Scheme. For thepurposes hereunder, "personal data" has the meaning ascribed to it in the Singapore Personal Data

Protection Act 2012 (No. 26 of 2012).

Appendix F – MHI Settlement Agreement

lN WITNESS WHEREOF this Agreement has been entered into by the Parties on the date first writtenabove.

Signed for and on behalf of

MITSUBISHI HEAVY INDUSTRIES, LTD.Name: [Ct^ þ^-qiDesignation:

U {aæ

41uqSigned for and on behalf of I

MITSUBISHI HEAVY INDUSTR¡ES ASIA PACIFIC PTE. LTD.

Witnessed by

Name:Designation

Name:Designation:

Witnessed by

Name:Designation:

lÞ1. W€À 4'\\r¡at c-nntul

z

â

lo sL;,^o |c¡i..r- r.

L.t t tçi lJe"-,

þJd ú.-^ r¿,t

SIGNATURE PAGE TO SETTLEMENT AGREEMENTBETWEEN MHI, HYFLUX, HYDROCHEM, HEPL, TUASONE AND TEE

-18-

l-


MITSUBISHIHEAVY INDUSTRIES ENVIRONMENTAL & CHEMICAL ENGINEERING CO., LTD.

Name: tl i^,'t'- i Y. m\ aao{oDesignation:

J-+- 4 ^l

Witnessed by

Name:Designation:

á

çh t'¿¿i ly'¿n

çr5a\ t.,v6r 4/


HYFLUX LTD.

Name:Designation

Witnessed by

Name:Designation

SIGNATURE PAGE TO SETTLEMENT AGREEMENTBETWEEN MHI, HYFLUX, HYDROCHEM, HEPL, TUASONE AND TEE

-19-

l.

Appendix G – Overview of Schemes

1 On the assumption that 60% of Hyflux’s shareholding is valued at S$400 million. 2 Restructuring Effective Date, which will likely take place on16 April 2019 or shortly thereafter. 3 Inclusive of loan by KfW IPEX GmbH of S$144 million (approx.) to Hydrochem which is guaranteed by Hyflux and crystallised debt of approximately S$65 million (approx.) from bonds and guarantees that have been called before November 2018. 4 After deducting a 20% cash incentive component (First Contingent Claim Management Payout) to be paid to project teams/employees responsible for extinguishment of contingent claim. 5 Where Contingent Claims become Extinguished, payment of the cash component will be made after deducting a 20% cash incentive component (Second Contingent Claim Management Payout) to be paid to project teams/employees responsible for extinguishment of contingent claim. 6 Minus the sum of all 20% cash incentive components (First Contingent Claim Management Payout and Second Contingent Claim Management Payout) paid out in respect of all Extinguished Contingent Claims. 7 Assuming all the Contingent Claims Crystallise and are paid out. The return per Claimant increases with each Contingent Claim becoming Extinguished instead of becoming Crystallised. 2 years after RED, any Contingent Claims that have not Crystallised or Extinguished will become Expired. 8 S$265 million Principal + S$13 million (approx.) accrued Interest 9 Inclusive of crystallised debt of S$10 million (approx.) from bonds and guarantees that have already been called since November 2018 and minor trade debt of an aggregate sum <S$500k. 10 Inclusive of the S$3.15 million in principal held by directors. 11 Inclusive of the S$1.202 million in principal held by directors. 12 S$1 per Intercompany Claimant. 13 From Hydrochem’s share of the Net Cash Flow from TuasOne EPC Contract upon TuasOne PCOD after making necessary deductions under MHI Settlement Agreement (eg, First Priority Payment to MHI, Trade Creditors’ Payment, cost overruns and LDs) 14 From Trade Creditors’ Payment of S$15m under MHI Settlement Agreement that can only be paid to TuasOne trade creditors. 15 From Hydrochem’s share of the Net Cash Flow from TuasOne EPC Contract upon TuasOne PCOD after making necessary deductions under MHI Settlement Agreement (eg, First Priority Payment to MHI, Trade Creditors’ Payment, cost overruns and LDs) 16 From Trade Creditors’ Payment of S$15m under MHI Settlement Agreement that can only be paid to TuasOne trade creditors.

PARTIES VALUE OF

CLAIMS (APPROX.)

SHARES IN HYFLUX POST-REORGANISATION

(Assumed equity value of S$667

million1)

EQUITY / CASH DISTRIBUTION (APPROX.)

ESTIMATED TOTAL RETURNS (APPROX.)

ESTIMATED PERCENTAGE RETURNS PER

CLAIMANT (APPROX.) 28 days (tentative) after RED2

Assuming TuasOne reaches

PCOD

One (1) year after RED

Two (2) years after RED

Investor – SM Investment Pte Ltd

60% in exchange for S$400m investment

Ordinary Shareholders of Hyflux

4% which includes 1.38% (approx.) existing ordinary shares of directors which

will be given to the P&Ps

HYFLUX SCHEME

Unsecured Scheme Parties

Bank Lenders S$717m3

27%

S$139m + 16.13% equity

Payout to all Unsecured Scheme Parties from escrow

upon Contingent Claims being Extinguished4

Payout to all Unsecured

Scheme Parties of all cash and equity

remaining in escrow5

S$232m6 + S$180m (assumed equity value of

27% equity) ≥24.5%7

MTNs S$278m8

Trade and other claimants

S$11m9

Contingent Claimants S$678m

S$93m + 10.87% equity placed in escrow (payout for

each Contingent Claim distributed upon

Crystallisation less incentive)

Debt Securities Scheme

Parties of Hyflux

Perpetual Capital Securities

S$500m principal10

9% (from Hyflux Scheme)

+

1.38% (approx.) from Hyflux directors’ contribution of their existing ordinary

shares in Hyflux

S$27m + 10.38% equity

S$27m + S$69.2m (assumed equity value of

10.38% equity)

Returns received by directors for their P&P

holdings will be redistributed to other P&Ps

10.69%

increased to 10.74%

(factoring redistribution of directors’ returns) Preference Shares

S$400m principal11

Subordinated Scheme Parties S$72.3m

Nominal12 Nominal ≈ 0%

HYDROCHEM SCHEME

General Trade and Other Claimants S$58.01m S$4.39m

S$2.05m +

(likely between S$3.75m and S$11.26m13)

Minimum return

Assuming TuasOne reaches PCOD

Minimum return

Assuming TuasOne reaches PCOD

S$4.39m S$6.44m to S$17.70m

S$5,000 + ~6.90%

S$5,000 + ~10.47% to 30.02%

TuasOne Trade Claimants S$17.73m S$2.05m S$11.57m S$2.05m S$13.62m14 S$5,000 + ~6.90%

S$5,000 + ~80.91%

Subordinated Scheme Parties S$254.2m Nominal

Nominal ≈ 0%

HMM SCHEME

General Trade and Other Claimants S$19.78 m S$2.52m

S$0.27m +

(likely between S$1.25m and

S$3.7415)

S$2.52m S$2.79m to

S$6.53m S$5,000 + ~9.65%

S$5,000 + ~11.03% to 30.59%

TuasOne Trade Claimants S$1.8m S$0.27m S$1.11m S$0.27m S$1.38m16 S$5,000 + ~9.65%

S$5,000 + ~80.91%

Intercompany Claimants S$205.3m Nominal

Nominal ≈ 0%

HE SCHEME All Claimants S$15.79m S$3.77m S$3.77m S$5,000 + ~21.78%

Subordinated Scheme Parties S$79.8m Nominal Nominal ≈ 0%

Appendix H – Overview of liquidation scenarios

Reliance Restricted

15 February 2019

Private and confidential

Hyflux LtdLiquidation Analysis – EstimatedRealisation Outcomes

This Document is prepared solely for Hyflux Ltd. We accept no responsibilityor liability to any person other than to Hyflux, and accordingly, if such otherpersons choose to rely upon any of the contents of this Document they do soat their own risk.

[XX] 2018Any person intending to read this document should first read this letter

Private and Confidential

Hyflux LtdHyflux Innovation Centre80 Bendemeer RoadSingapore 339949

Dear Sirs,

Project PhoenixErnst & Young Solutions LLP (“EY”) has been engaged by Hyflux Ltd (“Hyflux”) andits subsidiaries (collectively “Hyflux Group”) as financial advisor in relation to therestructuring of the Hyflux Group (the “Transaction”), in accordance with theengagement agreement dated 14 May 2018 (the “Engagement Agreement”).

Purpose of Document and restrictions on its useThis document (“Document”) was prepared for Hyflux in relation to providing a basisfor the Hyflux Group to have a discussion with its creditors regarding a restructuringproposal. It should not be used or relied upon by any other party.

This Document and its contents are private and confidential and informationcontained herein includes non-public and market sensitive information concerningthe Hyflux Group, and may not be quoted, referred to or shown to any other partieswithout our prior written consent.

We accept no responsibility or liability to any person other than to Hyflux, andaccordingly if such other persons choose to rely upon any of the contents of thisDocument they do so at their own risk.

Nature and scope of the servicesThe nature and scope of the services, including the basis and limitations, aredetailed in the Engagement Agreement.

Our work in connection with this engagement is of a different nature to that of anaudit or a review of information, as those terms are understood in any applicableauditing standards.

In preparing this Document, we have relied on the records of the Hyflux Group anddiscussions with parties involved in the Transaction, including the Hyflux Group’smanagement (“Management”), key employees and Hyflux’s legal advisors. Theinformation we have received is the responsibility of Hyflux Group’s management.We have not sought to establish the reliability, accuracy or completeness of theinformation given to us nor have we undertaken an audit of the information.Consequently, we give no assurance on such information.

Our work contained within this Document was completed on 10 November 2018.Therefore, the Document does not take account of events or circumstances arisingafter 10 November 2018 and we have no responsibility to update the Document forsuch events or circumstances.

Ernst & Young Solutions LLP (UEN T08LL0784H) is a limited liability partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A).A member firm of Ernst & Young Global Limited

Ernst & Young Solutions LLP

Transaction Advisory services

One Raffles Quay,North Tower, Level 18Singapore 048583

Tel: +65 6535 7777Fax: +65 6532 7662ey.com

Mailing Address:

Robinson RoadPO Box 384Singapore 900734

15 February 2019

A member firm of Ernst & Young Global Limited

Management has been provided with a copy of this report and have confirmed itsfactual accuracy. The report was approved for release on 15 February 2019.

Prospective financial information (“PFI”)

Please note that any prospective financial information (“PFI”) presented in thisDocument is based on the Hyflux Group management’s assumptions regardingfuture events, which may or may not occur as assumed and consequently, theactual results achieved may materially differ from those as presented in thisDocument. We take no responsibility for the achievement of projected results.

Except as otherwise noted, we have not analyzed or commented on macroeconomicor geopolitical conditions that could impact the PFI. We have not provided anyopinion, conclusion or any type of assurance about specific assumptions orcomponents of the PFI or on the PFI as a whole.

References to EY in the Document will relate to our analysis and will not indicatethat we take any responsibility for the information concerned or are assembling orassociating ourselves with any financial information including prospective financialinformation. Hyflux is solely responsible for any decision to execute or implementany such advice or recommendation, the actual execution or implementation or anythereof, the sufficiency of such advice or recommendation for your purposes, andthe results of such implementation.

Yours faithfully


Abbreviations

Company Hyflux LtdDebt Restructuring Exercise Court supervised process to reorganize the liabilities and businesses of Hyflux Ltd and its subsidiaries i.e.

Hydrochem (S) Pte Ltd, Hyflux Engineering Pte Ltd, Hyflux Membrane Manufacturing (S) Pte Ltd and HyfluxInnovation Centre Pte Ltd

EPC Engineering, Procurement and ConstructionGroup Hyflux Ltd and its subsidiariesHigh case Liquidation scenario, high estimated asset realizationsHydrochem Hydrochem (S) Pte LtdHyfluxShop HyfluxShop Holdings LtdJV Joint VentureLow case Liquidation scenario, low estimated asset realizationsm MillionMagtaa Magtaa Seawater Reverse Osmosis PlantPT Oasis PT Oasis Waters InternationalS$ Singapore DollarSingSpring SingSpring TrustTianjin Dagang Tianjin Dagang NewSpring Co. LtdTlemcen Tlemcen Desalination Investment CompanyTuaspring Tuaspring Pte LtdTus Water Tus Water Group Ltd


Liquidation scenario analysis – Hyflux LtdEstimated returns


Estimated returns –assumed insolvency date of 31 March 2018

(Unit: S$’m)

Low case High case Notes

Estimatedrealizable

value

Estimatedrealization

rate

Estimatedrealizable

value


rate

Total realizable assets

Less: preferential claimsTaxesLiquidators’ expenses, fees and disbursements

Available to unsecured creditors

Senior unsecured creditorsBank creditorsNoteholdersContingent creditorsTrade and other creditors

Total senior unsecured creditors

81

(2)(4)

75

573271

1,04672

1,962

177

(2)(4)

171

573271

1,04672

1,962

Note 1

Note 2

Note 3

Note 4

Estimated recovery for senior unsecured creditors 3.8% 8.7%

Surplus/ (Shortfall) to senior unsecured creditors (1,887) (1,791)

Subordinated unsecured creditorsPreference shareholdersPerpetual security holders

Total Subordinated unsecured creditors

400500900

400500900

Estimated recovery for subordinated unsecured creditors Nil Nil

Surplus/ (Shortfall) to subordinated unsecured creditors (900) (900)

Total Surplus/ (Shortfall) to all unsecured creditors (2,787) (2,691)

Surplus to shareholders - -Note- the recoveries detailed above set out the estimated potential recoveries for unsecured creditors including crystalised contingent creditors.

Liquidation scenario analysis – Hyflux LtdEstimated returns - notes


1. Total Realizable Assets► Please note that these returns represent amounts received by Hyflux Ltd only, in its position as the Group’s ultimate holding company.

Returns shown are primarily due to realizations from intercompany receivables due from subsidiaries.2. Preferential claims

► Pursuant to Section 328 of the Singapore Companies Act, the costs and expenses of the winding up including taxes and liquidator’sexpenses, fees and disbursements shall be paid in priority to all other unsecured debt.

► The estimated tax expense of approximately S$2m is based on the net outstanding tax payable to IRAS per the balance sheet as at 31March 2018.

► Liquidators’ expenses, fees and disbursements have been estimated to cover fees and expenses of the liquidator up to the dissolutionof the liquidation, including the estimated costs of any retained employees to oversee the asset realizations. However, the liquidators’expenses does not take into account of professional fees of external parties. We assume that there are no complex matters required tobe handled by the liquidator during the process of liquidation.

3. Senior unsecured creditors► The senior unsecured financial creditors refer to the bank creditors, contingent creditors, noteholders, trade creditors and other

creditors. The liquidation analysis was performed based on the available position of liabilities at the time of preparation of this analysisdated 10 November 2018:

► Trade and other liabilities as at 31 March 2018; and► Financial liabilities have been updated to 31 August 2018 (based on the occurrence of certain known events since 31 March

2018).4. Trade and other creditors

► The balances are made up of various items but mainly relate to intercompany trade and non-trade payables.

Liquidation scenario analysis – Hyflux LtdOther important matters to note (1/4)


Purpose of thisanalysis

► Our analysis has been prepared solely for Hyflux Ltd for the purpose of the Debt Restructuring Exercise. Theanalysis details the estimated realizations from a theoretical liquidation scenario of the Company as the ultimateholding company of the Group.

Approach of thisanalysis

► The analysis has been prepared on a ‘bottom-up’ basis where liquidation or sales of assets occur at each individualstandalone entity. This approach takes into account the intercompany flows within the Group which will be importantto the ultimate return to the Company. In this analysis, recoveries to the creditors of the Company includes the valuerecovered from its subsidiaries and value recovered from the assets from its associates and JVs (including outsideof Singapore in a number of cases). Additional analysis was performed to further consider the estimated realizationvalues derived from material assets / projects (including outside of Singapore in a number of cases) which may beavailable to the Company.

► In our analysis we have taken into account some of the standard practices (i.e. the likelihood of repayments fromlocal debtors, the ability of an overseas liquidator to enforce security (where relevant) upon local entities and theease of repatriating cash) that are specific to certain jurisdictions that could possibly have an impact on the ultimateliquidation returns of the Company.

► The data underpinning this analysis has been provided by the Company’s management. No audit procedure nor duediligence has been conducted on this data and it has not been verified for completeness and accuracy. This analysisalso relied on legal advice on the rights and obligations of available relevant agreements provided by the Company.

Estimated returnsto unsecuredcreditors

► The estimated total return to senior unsecured creditors of Hyflux Ltd in a liquidation scenario ranges from S$75million to S$171 million, based on the assumptions detailed in this analysis, which equates to a return of 3.8% to8.7% on an undiscounted basis (before taking into account the time value of money). We consider that returns tocreditors could take up to 5 years to deliver given the market norms in dealing with the complex and multi-jurisdictional structure of the Group.

► Please note that nil recovery is estimated for the subordinated unsecured creditors.



Overarchingassumptions

The overarching key assumptions that underpin our analysis are as follows:

1. Insolvency date as at 31 March 2018

► The analysis is based on the balance sheet as at 31 March 2018 (proxy to the moratorium date of 22 May2018). Where possible, we have reflected the updated balances based on certain known material eventsresulting in an increase in liabilities since 31 March 2018 (i.e. the calling of performance bonds). As such, anyother events post the assumed liquidation date are not considered in the analysis.

► The analysis does not include intercompany realizations from associates and JVs.

2. Impact of the Company’s liquidation on other Group companies

► Upon commencement of liquidation of the Company, many of the other Group entities (including Hydrochemand the EPC business generally) are also assumed to enter liquidation on or around the same time.Consequently, we also assume that construction activities on projects would immediately cease.

3. Employees

► Most of the employees would have their contracts of employment terminated immediately upon liquidation. Weassume only a small base of skeleton staff would be retained by the liquidator to assist with the realization ofassets.

4. Material asset owning entities / investments

► We have assumed that certain asset owning entities / investments which do not require financial support fromthe Company, are not placed into liquidation and are instead realized through the sale of shares via an orderlysale process.

5. Debt profile

► All debt in the Company is unsecured.

► No security has been granted to any of the said liabilities. Only certain bank facilities are guaranteed byHydrochem.



Overarchingassumptions(continued)

5. Debt profile (continued)

► In addition to the liabilities reflected on the balance sheet i.e. bank facilities, medium term notes, preferenceshares, perpetual securities, trade and other payables, the Company also has off balance sheet exposure tocorporate guarantees and/or performance bonds relating to certain EPC works / projects / asset owningentities. It has been assumed that all contingent liabilities have crystallised.

6. Adjustments to estimated recoveries

► We have analyzed each of the material assets of the Group and assessed the capacity for the liquidator torealize value.

► Tuaspring – we have assumed that the sale process in a liquidation scenario is not likely to yield anyexcess net sale proceeds over the secured bank debt.

► Magtaa and Tlemcen – we have assumed that there is unlikely to be any value in the shares of the twoAlgerian asset owing entities, taking into consideration inter alia, bank security, shareholder agreements,offtaker obligations and unresolved disputes with project stakeholders.

► Other assets – realization values are mainly attributed to other assets held for sale i.e. China assets(including Tianjin Dagang, Tus Water), PT Oasis (which has since been sold), SingSpring, andHyfluxShop. Unless set out in shareholding agreements, we assume that equity values are derived basedon the book or market values after settling all liabilities, sale realization costs and application of certaindiscounts given the potential business / financial stress.

► Where assets are held in challenging or complex jurisdictions, we have applied a discount to the likelyrecoverability. However, specific local insolvency laws in jurisdictions that may prove challenging torepatriate cash, have not been examined in further detail.

► The available cash as at 31 March 2018 has been assumed to be partly used for operational purposes, with20% of the balance remaining at the date of the liquidation. Any amounts held in fixed deposit / reserveaccounts are assumed to be set off in full against the bank creditors’ unsecured claims.

► Trade and other receivables relating to third party receivables and are assumed to be realized in a range of0%-20%.



Assumptions –Low case

► The Low case estimates returns to unsecured creditors where liquidation or sales of assets occur at each individualstandalone entity and we assume that the environment in which the liquidator is trying to realize value from theassets / investments is very challenging.

► The Low case also includes forced sales on certain assets necessitated by the absence of working capital facilitieswhich reduces a liquidator’s ability to transact for maximum value.

Assumptions –High case

► The High case has factored a greater stability into the liquidation process as a whole, largely the key assets /investments could be realized at a higher value.

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Hydrochem (S) Pte LtdLiquidation Analysis – EstimatedRealisation Outcomes

This Document is prepared solely for Hyflux Ltd. We accept no responsibilityor liability to any person other than to Hyflux Ltd, and accordingly, if suchother persons choose to rely upon any of the contents of this Document theydo so at their own risk.




Dear Sirs,













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Abbreviations

Debt Restructuring Exercise Court supervised process to reorganize the liabilities and businesses of Hyflux Ltd and its subsidiaries i.e.Hydrochem (S) Pte Ltd, Hyflux Engineering Pte Ltd, Hyflux Membrane Manufacturing (S) Pte Ltd and HyfluxInnovation Centre Pte Ltd

EPC Engineering, Procurement and ConstructionGroup Hyflux Ltd and its subsidiariesHigh case Liquidation scenario, high estimated asset realizationsHydrochem Hydrochem (S) Pte LtdJV Joint VentureLow case Liquidation scenario, low estimated asset realizationsm MillionPPE Property, plant and equipmentS$ Singapore Dollar


Liquidation scenario analysis – HydrochemEstimated returns



(Unit: S$’m)


Estimatedrealizable

value


rate

Estimatedrealizable

value


rate


Less: preferential claimsEmployee claimsLiquidators’ expenses, fees and disbursements


Unsecured creditorsBank creditorsContingent creditorsTrade and other creditors

Total unsecured creditors

12

(14)(1)

-

144974548

1,666

18

(14)(1)

3

144974548

1,666

Note 1

Note 2

Note 3

Estimated recovery for unsecured creditors Nil 0.2%

Surplus/ (Shortfall) to unsecured creditors (1,666) (1,663)


Liquidation scenario analysis – HydrochemEstimated returns - notes


1. Total Realizable Assets► Please note that these returns represent amounts received by Hydrochem only. Returns shown are primarily due to realizations from

other assets including intercompany receivables and income tax receivables.2. Preferential claims


► The estimated employee claims of approximately S$14m is based on the assumption of early termination of employees uponliquidation.

► Liquidators’ expenses, fees and disbursements have been estimated to cover fees and expenses of the liquidator up to the dissolutionof the liquidation, including the estimated costs of any retained employees to oversee the asset realizations. However, the liquidators’expenses does not take into account of professional fees of external parties. We assume that there are no complex matters required tobe handled by the liquidator during the process of liquidation.

3. Unsecured creditors► The unsecured creditors refer to the bank creditors, contingent creditors, trade creditors and other creditors. The liquidation analysis

was performed based on the available position of liabilities at the time of preparation of this analysis dated 10 November 2018:► Trade and other liabilities as at 31 March 2018; and► Financial liabilities have been updated to 31 August 2018 (based on the occurrence of certain known events since 31 March

2018).

Liquidation scenario analysis – HydrochemOther important matters to note (1/3)



► Our analysis has been prepared solely for Hyflux Ltd for the purpose of the Debt Restructuring Exercise. Theanalysis details the estimated realizations from a theoretical liquidation scenario of Hydrochem.


► The analysis has been prepared on a ‘bottom-up’ basis where liquidation or sales of assets occur at each individualstandalone entity. This approach takes into account the intercompany flows within the Group which will be importantto the ultimate return to Hydrochem. In this analysis, recoveries to the creditors of Hydrochem includes the valuerecovered from its subsidiaries (including outside of Singapore in a number of cases). Additional analysis wasperformed to further consider the estimated realization values derived from material projects (including outside ofSingapore in a number of cases) which may be available to Hydrochem.

► In our analysis we have taken into account some of the standard practices (i.e. the likelihood of repayments fromlocal debtors, the ability of an overseas liquidator to enforce security (where relevant) upon local entities and theease of repatriating cash) that are specific to certain jurisdictions that could possibly have an impact on the ultimateliquidation returns of Hydrochem.

► The data underpinning this analysis has been provided by Hydrochem management. No audit procedure nor duediligence has been conducted on this data and it has not been verified for completeness and accuracy. This analysisalso relied on legal advice on the rights and obligations of available relevant agreements provided by Hydrochem.


► The estimated total return to unsecured creditors in a liquidation scenario ranges from nil recovery in a Low case toS$3 million in a High case, based on the assumptions detailed in this analysis, which equates to a return of 0% to0.2% on an undiscounted basis (before taking into account the time value of money). We consider that returns tocreditors could take up to 5 years to deliver given the market norms in dealing with the complex and multi-jurisdictional structure of the Group.






► The analysis is based on the balance sheet as at 31 March 2018 (proxy to the moratorium date of 22 May2018). Where possible, we have reflected the updated balances based on certain known material eventsresulting in an increase in liabilities since 31 March 2018 (i.e. the calling of performance bonds). As such, anyother events post the assumed liquidation date are not considered in the analysis.

► The analysis does not include intercompany realizations from associates and JVs within the Group.

2. Impact of Hyflux Ltd’s liquidation

► Upon commencement of liquidation of Hyflux Ltd who is the ultimate holding company of the Group, many ofthe other Group entities (including Hydrochem and the EPC business generally) are also assumed to enterliquidation on or around the same time. Consequently, we also assume that construction activities on projectswould immediately cease.

3. Employees



► We have assumed that certain asset owning entities / investments which do not require financial support fromHyflux Ltd, are not placed into liquidation and are instead realized through the sale of shares via an orderly saleprocess.

5. Debt profile

► All debt in Hydrochem is unsecured. No security has been granted to any of the said liabilities. Only the bankfacilities, performance bonds and certain other liabilities are guaranteed by Hyflux Ltd.

► In addition to the liabilities reflected on the balance sheet, Hydrochem also has off balance sheet exposure tocorporate guarantees and/or performance bonds relating to certain EPC works. It has been assumed that allcontingent liabilities have crystallised.





► Where assets are held in challenging or complex jurisdictions, we have applied a discount to the likelyrecoverability. However, specific local insolvency laws in jurisdictions that may prove challenging to repatriatecash, have not been examined in further detail.

► The available cash as at 31 March 2018 has been assumed to be partly used for operational purposes, with20% of the balance remaining at the date of the liquidation. Any amounts held in fixed deposit / reserveaccounts are assumed to be set off in full against the bank creditors’ unsecured claims.

► The income tax receivable as at 31 March 2018 have been assumed to be recovered in full.

► The balance sheet contains multiple items such as PPE, stocks, prepayments, trade and other receivables andthese items are assumed to be realized in a range of 0%-20%. Please note that trade and other receivablesrelate to third party receivables.




Assumptions-High case






ED None



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Hyflux Engineering Pte LtdLiquidation Analysis – EstimatedRealisation Outcomes





Dear Sirs,













Tel: +65 6535 7777Fax: +65 6532 7662ey.com

Mailing Address:


15 February 2019







Yours faithfully


Abbreviations


Group Hyflux Ltd and its subsidiariesHigh case Liquidation scenario, high estimated asset realizationsHE Hyflux Engineering Pte LtdJV Joint VentureLow case Liquidation scenario, low estimated asset realizationsm MillionPPE Property, plant and equipmentS$ Singapore Dollar


Liquidation scenario analysis – HEEstimated returns



(Unit: S$’m)


Estimatedrealizable

value


rate

Estimatedrealizable

value


rate


Less: preferential claimsTaxesLiquidators’ expenses, fees and disbursements


Unsecured creditorsTrade and other creditors


6.1

(1.9)(0.5)

3.7

92.992.9

16.3

(1.9)(0.5)

13.9

92.992.9

Note 1

Note 2

Note 3

Estimated recovery for unsecured creditors 4.0% 15.0%

Surplus/ (Shortfall) to unsecured creditors (89.2) (79.0)

Surplus to shareholders - -

Liquidation scenario analysis – HEEstimated returns - notes


1. Total Realizable Assets► Please note that these returns represent amounts received by HE only. Returns shown are primarily due to realizations from

intercompany receivables.2. Preferential claims


► The estimated tax expense of approximately S$1.9m is based on the provision of income tax per the balance sheet as at 31 March2018.

► Liquidators’ expenses, fees and disbursements have been estimated to cover fees and expenses of the liquidator up to the dissolutionof the liquidation, including the estimated costs of any retained employees to oversee the asset realizations. However, the liquidators’expenses does not take into account of professional fess of external parties. We assume that there are no complex matters required tobe handled by the liquidator during the process of liquidation.

3. Trade and other creditors► The liquidation analysis was performed based on the available position of liabilities (i.e. as at 31 March 2018).► The balances are made up of various items but mainly relate to intercompany trade and non-trade payables.

Liquidation scenario analysis – HEOther important matters to note (1/3)



► Our analysis has been prepared solely for Hyflux Ltd for the purpose of the Debt Restructuring Exercise. Theanalysis details the estimated realizations from a theoretical liquidation scenario of HE.


► The analysis has been prepared on a ‘bottom-up’ basis where liquidation or sales of assets occur at each individualstandalone entity. This approach takes into account the intercompany flows within the Group which will be importantto the ultimate return to HE. In this analysis, recoveries to the creditors of HE includes the value recovered from itssubsidiaries and value recovered from the assets from its JVs (including outside of Singapore in a number ofcases). Additional analysis was performed to further consider the estimated realization values derived from materialassets (including outside of Singapore in a number of cases) which may be available to HE.

► In our analysis we have taken into account some of the standard practices (i.e. the likelihood of repayments fromlocal debtors, the ability of an overseas liquidator to enforce security (where relevant) upon local entities and theease of repatriating cash) that are specific to certain jurisdictions that could possibly have an impact on the ultimateliquidation returns of HE.

► The data underpinning this analysis has been provided by HE’s management. No audit procedure nor due diligencehas been conducted on this data and it has not been verified for completeness and accuracy. This analysis alsorelied on legal advice on the rights and obligations of available relevant agreements provided by HE.


► The estimated total return to unsecured creditors in a liquidation scenario ranges from S$3.7 million to S$13.9million, based on the assumptions detailed in this analysis, which equates to a return of 4.0% to 15.0% on anundiscounted basis (before taking into account the time value of money). We consider that returns to creditors couldtake up to 5 years to deliver given the market norms in dealing with the complex and multi-jurisdictional structure ofthe Group.






► The analysis is based on the balance sheet as at 31 March 2018 (proxy to the moratorium date of 22 May2018). Any other events post the assumed liquidation date are not considered in the analysis.


2. Impact of the Hyflux Ltd’s liquidation

► Upon commencement of liquidation of Hyflux Ltd who is the ultimate holding company of the Group, many ofthe other Group entities (including HE) are also assumed to enter liquidation on or around the same time.Consequently, we also assume that construction activities on projects would immediately cease.

3. Employees




5. Debt profile

► All debt in HE is unsecured. No security has been granted to any of the said liabilities.






► The available cash as at 31 March 2018 has been assumed to be partly used for operational purposes, with20% of the balance remaining at the date of the liquidation.

► The balance sheet contains multiple items such as PPE, stocks, prepayments, trade and other receivableswhich are assumed to be realized in a range of 0%-20%. Please note that trade and other receivables relate tothird party receivables.










ED None



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Hyflux MembraneManufacturing (S) Pte LtdLiquidation Analysis – EstimatedRealisation Outcomes





Dear Sirs,













Tel: +65 6535 7777Fax: +65 6532 7662ey.com

Mailing Address:


15 February 2019







Yours faithfully


Abbreviations


EPC Engineering, Procurement and ConstructionGroup Hyflux Ltd and its subsidiariesHigh case Liquidation scenario, high estimated asset realizationsHydrochem Hydrochem (S) Pte LtdHMM Hyflux Membrane Manufacturing (S) Pte LtdJV Joint VentureLow case Liquidation scenario, low estimated asset realizationsm MillionPPE Property, plant and equipmentS$ Singapore Dollar


Liquidation scenario analysis – HMMEstimated returns



(Unit: S$’m)


Estimatedrealizable

value


rate

Estimatedrealizable

value


rate


Less: preferential claimsLiquidators’ expenses, fees and disbursements


Unsecured creditorsContingent creditorsTrade and other creditors


8.8

(0.5)

8.3

42.1229.8271.9

14.9

(0.5)

14.4

42.1229.8271.9

Note 1

Note 2

Note 3

Estimated recovery for unsecured creditors 3.1% 5.3%

Surplus/ (Shortfall) to unsecured creditors (263.6) (257.5)


Liquidation scenario analysis – HMMEstimated returns - notes


1. Total Realizable Assets► Please note that these returns represent amounts received by HMM only. Returns shown are primarily due to realizations from assets

including PPE and intercompany receivables.2. Preferential claims

► Liquidators’ expenses, fees and disbursements have been estimated to cover fees and expenses of the liquidator up to the dissolutionof the liquidation, including the estimated costs of any retained employees to oversee the asset realizations. However, the liquidators’expenses does not take into account of professional fess of external parties. We assume that there are no complex matters required tobe handled by the liquidator during the process of liquidation.

3. Unsecured creditors► The unsecured financial creditors refer to the contingent creditors, trade creditors and other creditors. The liquidation analysis was

performed based on the available position of liabilities at the time of preparation of this analysis dated 10 November 2018:► Trade and other liabilities as at 31 March 2018; and► Financial liabilities have been updated to 31 August 2018 (based on the occurrence of certain known events since 31 March

2018).4. Trade and other creditors

► The balances are made up of various items but mainly relate to intercompany trade and non-trade payables.

Liquidation scenario analysis – HMMOther important matters to note (1/3)



► Our analysis has been prepared solely for Hyflux Ltd for the purpose of the Debt Restructuring Exercise. Theanalysis details the estimated realizations from a theoretical liquidation scenario of HMM.


► The analysis has been prepared on a ‘bottom-up’ basis where liquidation or sales of assets occur at each individualstandalone entity. This approach takes into account the intercompany flows within the Group which will be importantto the ultimate return to HMM. In this analysis, recoveries to the creditors of HMM includes the value recovered fromcertain Group entities (including outside of Singapore in a number of cases). Additional analysis was performed tofurther consider the estimated realization values derived from material assets / projects (including outside ofSingapore in a number of cases) which may be available to HMM.

► In our analysis we have taken into account some of the standard practices (i.e. the likelihood of repayments fromlocal debtors, the ability of an overseas liquidator to enforce security (where relevant) upon local entities and theease of repatriating cash) that are specific to certain jurisdictions that could possibly have an impact on the ultimateliquidation returns of HMM.

► The data underpinning this analysis has been provided by HMM’s management. No audit procedure nor duediligence has been conducted on this data and it has not been verified for completeness and accuracy. This analysisalso relied on legal advice on the rights and obligations of available relevant agreements provided by HMM.


► The estimated total return to unsecured creditors in a liquidation scenario ranges from S$8.3 million to S$14.4million, based on the assumptions detailed in this analysis, which equates to a return of 3.1% to 5.3% on anundiscounted basis (before taking into account the time value of money). We consider that returns to creditors couldtake up to 5 years to deliver given the market norms in dealing with the complex and multi-jurisdictional structure ofthe Group.






► The analysis is based on the balance sheet as at 31 March 2018 (proxy to the moratorium date of 22 May2018). Where possible, we have reflected the updated balances based on certain known material eventsresulting in an increase in liabilities since 31 March 2018. As such, any other events post the assumedliquidation date are not considered in the analysis.


2. Impact of the Hyflux Ltd’s liquidation

► Upon commencement of liquidation of Hyflux Ltd, many of the other Group entities (including HMM,Hydrochem and the EPC business generally) are also assumed to enter liquidation on or around the sametime. Consequently, we also assume that construction activities on projects would immediately cease.

3. Employees




5. Debt profile

► All debt in HMM is unsecured. No security has been granted to any of the said liabilities.

► In addition to the liabilities reflected on the balance sheet i.e. trade and other payables, HMM also has offbalance sheet exposure to certain EPC works and leases. It has been assumed that all contingent liabilitieshave crystallised.






► The available cash as at 31 March 2018 has been assumed to be partly used for operational purposes, with20% of the balance remaining at the date of the liquidation.

► The balance sheet contains multiple items such as PPE, stocks, prepayments, trade and other receivableswhich are assumed to be realized in a range of 0%-20%. Please note that trade and other receivables relate tothird party receivables.










ED None



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