SINGAPORE - Hyflux's potential white knight Utico is looking to take an 88 per cent stake in the troubled water treatment firm with an investment of $300 million as equity and a $100 million shareholder loan, but the two are still working towards a binding agreement.
United Arab Emirates utility Utico also intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group plus additional cash to holders of Hyflux's perpetual securities and preference (PNP) shareholders, both companies said in a joint update filed with the Singapore Exchange on Thursday morning (July 11).
After the June 27 deadline for Utico and Hyflux to enter into a binding agreement, "there have been informal discussions ongoing" and "the parties are now progressing towards a deal subject to approvals from all stakeholders and definitive documents being finalised and entered into".
"The parties are cognisant of time being of the essence to preserve value," they added.
Both parties intend to enter "definitive documentation in respect of the proposed investment" as soon as possible, and to hold townhall meetings for the PNP investors and the holders of medium term notes, "ideally before the next court hearing".
Details of Utico's offer to PNP shareholders will be announced prior to the townhall.
Previously, Utico chief executive Richard Menezes said in late May that as part of the overall deal, small investors of up to $2,000 to $3,000 could get 50 per cent cash redemption along with full redemption opportunity while the rest of Hyflux's investors could get a similar but staggered and cascade deal.
Hyflux added that there have been face-to-face meetings with Utico, and both parties met representatives of various stakeholder groups on Tuesday and Wednesday to discuss the proposed investment.
The company previously said it was in talks with seven different parties regarding a potential cash injection and wanted to enter into a binding term sheet with one of them by mid-June.
The talks followed a failed rescue deal with Indonesia's Salim-Medco group in April.