Hyflux, Utico lock horns over deadline for rescue deal

Embattled water treatment group Hyflux and one-time white knight Utico are at odds over whether last year's restructuring agreement is still on the table.

Correspondence between the two parties released by Hyflux on Tuesday night suggests the deal has hit some speed bumps.

Hyflux had sought "Utico's urgent clarification" on whether the Emirati utilities group meant that its revised rescue offer was open for acceptance until June 30, or whether its revised offer was that the long-stop date under last year's agreement was extended until that date.

Utico chief executive Richard Menezes wrote in an e-mail dated June 16 that the restructuring agreement from last November, which was to have expired at its long-stop date on May 26, was extended by a revised offer that Utico gave Hyflux in May and June.

Under the revised offer, Utico wants to tweak the terms of its rescue deal, including having all of Hyflux's creditors take payment in Utico and Hyflux shares, rather than in cash.

An extension of the revised offer's stipulated deadline of June 30 "can be considered after Hyflux board acceptance and creditors statement that they are 'open' for engagement to consider this proposition (sic)", Mr Menezes said in his e-mail to Hyflux.

Among other clarifications, he also said Utico will set the threshold at $10,000 for "small investors" holding preference shares and perpetual securities (PnP), after Hyflux raised questions on issues such as Utico's payment plans for PnP holders.

That is even as Hyflux independent director Lau Wing Tat, who heads the risk-management committee, stated in a letter to Mr Menezes on Monday that the company's position that the restructuring agreement "has ipso facto ceased and determined" already.

Though he told Mr Menezes that Hyflux is still weighing Utico's revised offer, he also flagged coronavirus pandemic-related restrictions in Singapore that would preclude any physical scheme meetings needed to approve the revised offer.

Any extension must thus be longer than June 30, Mr Lau added.

The board has now said Hyflux "is considering the content" of the e-mail from Mr Menezes.

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