Another potential investor for Hyflux amid threat of judicial management

Another potential investor has surfaced for embattled water treatment firm Hyflux, along with an invitation memorandum from Indonesian magnate Johnny Widjaja and a sweetened offer from Middle Eastern utility firm Utico.

Hyflux said it had received a letter of interest from Unilegend Investments, a Singapore investment holding company, with an unnamed client interested in exploring the possibility of investing in the group, in a Singapore Exchange filing on Thursday night.

"Our clients' areas of focus include clean energy and water, and we have been following with keen interest the debt restructuring exercise," Unilegend said in the letter, released by Hyflux yesterday.

Unilegend added: "Our client has plans to carry out seawater desalination projects in Shandong and Tianjin in China and sees great synergies with Hyflux. Upon completing our investment in Hyflux, whether by becoming the substantial shareholder of Hyflux, or the owner of the debt of the Hyflux group, our client is prepared to make available working capital to the group."

Unilegend also said it would not consider making this investment if Hyflux founder Olivia Lum and her current management and board are removed, or if the Hyflux group is placed in judicial management or liquidation. It said it looks forward to conducting more in-depth discussions as soon as possible

Separately, Hyflux said it has received an invitation memorandum from Pison Investments, a Singapore-incorporated investment vehicle for Mr Widjaja, an Indonesian businessman who late last month expressed interest in investing up to $300 million in Hyflux in the most "expedient manner possible". This includes buying up the existing debt of the group.

In an SGX announcement on Thursday night, Hyflux said it has seen a copy of a letter issued by Bank Mandiri (Persero) to Pison, confirming that $200 million of Mr Widjaja's funds in the bank have been "irrevocably blocked and reserved" until July 10, 2021, for the investment.

According to Mr Wijaja's letter of interest, once he becomes the substantial shareholder of the company or the owner of the said debt, he is prepared to provide $100 million of working capital to the group. Mr Widjaja also said that he would not consider making this investment if the current management of Hyflux, including Ms Olivia Lum and the board of directors are removed, or if any member of the group is placed in judicial management or liquidation.

Meanwhile, on Thursday, Utico again revised its offer for Hyflux, raising it to a minimum of $485 million comprising cash and stock.

The new indication of interest and offers come after bank lenders sought to put Hyflux under judicial management and after discussions with Utico hit a speed bump in May when the United Arab Emirates utility revoked the cash component of its $400 million rescue deal and demanded that creditors accept shares of Utico and Hyflux as payment, instead of cash.

Meanwhile, Justice Aedit Abdullah is expected to hear, on July 27, the applications by an unsecured working group (UWG) of banks and by ESR-Reit, to be carved out of the moratorium.

ESR-Reit's trustee had filed proofs of claim in March last year against Hyflux and its unit Hyflux Membrane Manufacturing (S), which leases the industrial Reit's property at 8 Tuas South Lane.

If a carve-out is approved, the UWG plans to file an application to appoint judicial managers to oversee Hyflux in place of the present management.

Hyflux's debt moratorium has been extended till July 30.