Hyflux asks Utico to address concerns raised by creditor groups before townhall can be held

Hyflux's letter made reference to an earlier letter from Utico on Oct 9.
Hyflux's letter made reference to an earlier letter from Utico on Oct 9.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Hyflux has asked its Middle Eastern suitor Utico to address concerns flagged by creditor groups before a virtual townhall can be held for the water treatment firm's perpetual securities and preference shares (PnP) investors.

In a letter to Utico that was released to the Singapore Exchange late Friday night (Oct 9), Hyflux independent director Lau Wing Tat said: "Hyflux's position is that, prior to any such townhall being organised, Utico should first set out clearly how it intends to deal with concerns raised by the various creditor groups; and if necessary, provide revised terms for the creditors' consideration." In this way, the townwall will be useful and will not waste time and resources, Mr Lau added.

Mr Lau also highlighted in the letter that the Securities Investors Association (Singapore), or Sias, does not intend to endorse Utico's offer based on its current terms, and that Utico has yet to convince the medium-term note (MTN) informal steering committee and/or the unsecured working group (UWG) to support Utico's current offer.

Hyflux's letter made reference to an earlier letter from Utico on Oct 9. In that letter, Utico requested for a virtual townhall to be arranged by Hyflux with investors of the firm's PnP on either Saturday afternoon or Sunday evening.

In the letter, Utico noted that Sias had received "few responses" to their letter to P&P on Sept 25, which was based on Utico's offer on July 23. Of those who had responded, "majority have accepted Utico's proposal", the Middle Eastern utility provider said, adding that the July offer does not release Hyflux's directors, deeming it acceptable based on a condition put forward by some respondents.

The suitor went on to highlight that it has been the only party to conduct two townhalls for P&P holders, of which the first was attended by some 450-500 people and the second by about 50-70 people. "Majority (of) respondents/participants have accepted Utico's proposal," Utico said in the letter.

Utico added: "We also noted from the recent Hyflux affidavit, it states Pison (Investments) has made an offer to P&P. This is contrary to the Sias letter of Oct 7. This may also be explained." Pison and Aqua Munda are other potential Hyflux suitors.

On Oct 10, Utico followed up Hyflux's letter with a statement that was released to the media. In the latest statement, Utico reiterated that it remained ready for a virtual townhall on Sunday evening.

"Hyflux (on Saturday) delayed the P&P virtual townhall to give Pison time to make an offer to P&P working with Sias. However, Sias issued a letter to Hyflux on Oct 7 that there are no offers to P&P than than Utico," Utico said in the statement.

"It is interesting to note that as per Hyflux's own statement, UWG has asked Pison to ensure P&P agrees to their offer, prior to UWG engaging with investors including Pison," Utico went on to say.

"Three representative sample votes from P&P have given majority approval for Utico's offer so far - the only approvals Hyflux has received for any offer to P&P," Utico added.