SINGAPORE - A new plan is on the table for debt-stricken Hyflux that could see it avoid liquidation and keep the 34,000 retail investors "whole in its books", an investor watchdog said on Monday.

The Securities Investors Association (Singapore), or Sias, said this information came from a meeting with representatives from the water treatment firm, including group chief executive Olivia Lum, on Monday afternoon (April 22).

Sias president David Gerald said he was briefed by Hyflux advisers that the company is working out a "credible plan where the senior unsecured perps and pref holders will be much better off than in a liquidation".

The request by Sias to avoid any haircut for retail investors will be accommodated in this plan, though it will first need to be submitted to court in an affidavit, he added. The next court update for the supervised restructuring process of Hyflux is on April 25.

The watchdog had asked to meet to discuss Hyflux's game plan after a $530 million rescue deal with former white knight SM Investments went awry earlier this month. In addition, national water agency PUB said last week that it will take over Hyflux's Tuaspring desalination plant on May 17.

Mr Gerald said: "According to the advisers, for the new plan to materialise, the company will need at least three months, which Sias supports in the interest of all retail investors.

"Sias calls on all parties, senior and junior creditors to give the company the time to work on the alternative plan to avoid liquidation, which will result in a very adverse return to all the creditors and stakeholders."

The meeting at the Sias office was attended by Ms Lum and Hyflux directors Teo Kiang Kok, Gay Chee Cheong, Christopher Murugasu and Lau Wing Tat, as well as veteran restructuring expert Nicky Tan from nTan Corporate Advisory and the company's solicitor, Mr Manoj Sandrasegar from WongPartnership.

Mr Gerald did not elaborate on the new plan proposed by Hyflux. The Straits Times has asked the company for comments.

The clock continues to tick for Hyflux, with an April 30 debt moratorium that protects the company from its creditors quickly approaching, and this could prevent the firm from carrying out the new plan.

For the company to have at least three months to work out details, Hyflux would likely need to call for an extension to the deadline on April 25.