Hyflux winding up hearing adjourned after intervention by Utico

Hyflux Innovation Centre in Bendemeer Road.
Hyflux Innovation Centre in Bendemeer Road.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - White knight suitor Utico is making another last-ditch attempt to intervene in Hyflux's winding up process.

The Middle Eastern utility firm was looking to file an affidavit, which refutes what judicial managers (JMs) have asserted regarding the failure to proceed with certain negotiations for the restructuring of Hyflux, the Singapore High Court heard on Monday (July 12).

This follows a hearing before High Court Justice Aedit Abdullah on the winding up application filed last month by Hyflux's JMs from Borrelli Walsh after restructuring negotiations with potential investors had fallen through.

Justice Aedit had granted permission for Utico's draft affidavit to be circulated among creditors within the day. The winding up hearing was adjourned, and a new date will be fixed in a pre-trial conference on Tuesday.

But Justice Aedit pointed out that commercial judgements are generally left to the JMs, and Utico currently does not have a standing as a shareholder nor as a creditor.

The court heard that it is in the "creditors' general interest" that Utico's affidavit is heard, and there is evidence that could impact whether Hyflux should wind up without further exploring options with Utico, which is represented by lawyers from Braddell Brothers.

Hyflux's JMs, represented by lawyers from Fullerton Law Chambers with help from Senior Counsel Kenneth Tan, countered these statements, saying that the deal with Utico was never pursued because there was insufficient evidence that they were able to bring the deal to fruition.

Furthermore, Hyflux had been seeking investors even before it came under judicial management; and Utico was involved between April 2019 to November 2020, giving it ample time to obtain support from creditors.

Following a surprise bid by Utico CEO Richard Menezes two days afer a winding up application was filed in June, the JMs had stated that Utico remained unable to meet the minimum conditions required to consider an offer, just as it was before their previous discussions were terminated.

"We are looking at an investor who is at this stage trying to upend the whole process after there have been extensive negotiations and even a conditional sale agreement signed with other bidders", said Mr Tan.

Keppel Infrastructure Trust (KIT) had entered into a conditional agreement to acquire the remaining 30 per cent stake it does not already own in SingSpring Desalination Plant from Hyflux for S$12 million, KIT's trustee-manager announced earlier this month.

The court also heard that Utico is willing to put up a S$10 million non-refundable deposit but on the condition that it is given a period of 60 days to negotiate with the JMs on restructuring.

This was, however, dismissed by Judge Aedit as he was not assured by what was offered by Utico. He said that he was willing to consider adjournment on those grounds if Utico had been able to put down money immediately for Hyflux's operations.