New investor offers to buy over $1.8b of Hyflux debts

According to the invitation notice sent to Hyflux, Aqua Munda has estimated that these debts together come up to about $1.8 billion.
According to the invitation notice sent to Hyflux, Aqua Munda has estimated that these debts together come up to about $1.8 billion.PHOTO: ST FILE

Offer covers debts owned by holders of medium-term notes, unsecured creditors, subsidiaries

In the latest twist to the Hyflux saga, a new investor set up this week is offering to buy over some of the embattled water treatment firm's debts.

Singapore-incorporated Aqua Munda has offered to buy out debts owned by holders of Hyflux's medium-term notes - the 4.25 per cent notes due last year, and 4.6 per cent and 4.2 per cent notes due this year - as well as unsecured creditors of Hyflux and three of its subsidiaries, Hyflux said in a Singapore Exchange filing on Tuesday night.

These debts amount to about $1.8 billion, including $750 million of contingent liabilities, said Aqua Munda in its invitation notice to Hyflux.

The water treatment firm has about 50,000 shareholders, bondholders, perpetual securities holders and preference shareholders, and its liabilities stood at $2.95 billion as at March 31 last year.

Aqua Munda's offer does not extend to the 34,000 retail perpetual securities and preference shareholders who are owed some $900 million.

The invitation will open on Dec 30 and expire on Jan 10 next year, "unless extended or earlier terminated", Aqua Munda said.

A more detailed memorandum, which will set out details and instructions on how creditors can tender their offers for Aqua Munda to purchase for cash, will be issued by Dec 27, it said.

It is not known what Aqua Munda's conditions for purchasing creditors' debts are, and how many cents to the dollar creditors may get by selling their debt to the firm.

"The investor (Aqua Munda) shall, at its sole and absolute discretion, determine which of the tendered offers to accept and shall not be bound to give any grounds for the acceptance or rejection of any tendered offer," Aqua Munda said in its letter.

 
 
 

According to corporate filings, Aqua Munda was incorporated on Tuesday and its main business is listed as the "manufacture of water treatment, waste treatment and oilfield chemicals".

The company has a share capital of $1 million and its sole owner and director is Mr Bambang Sugeng Kajairi, a Singapore citizen.

Aqua Munda is registered to an address on the 27th floor of Ocean Financial Centre and its transaction adviser is listed as consultancy firm Duff & Phelps in Hong Kong.

WongPartnership lawyer Manoj Pillay Sandrasegara, who represents Hyflux, told The Straits Times yesterday: "Hyflux is monitoring the situation and it's premature at this stage to comment on how Aqua Munda's surfacing would have an impact on the restructuring, without more information."

Hyflux's financial advisers are EY and NTan Corporate Advisory.

Last month, Hyflux announced it had reached a restructuring agreement with United Arab Emirates-based utility provider Utico.

The $400 million rescue deal will see Utico take a 95 per cent stake in Hyflux, with around $250 million going to senior unsecured creditors, including banks and suppliers. Schemes of arrangement for the finalised deal will have to be approved by Hyflux's creditors.

Hyflux's debt moratorium has been extended to the end of January next year, with the next court hearing scheduled for Jan 29.

A version of this article appeared in the print edition of The Straits Times on December 19, 2019, with the headline 'New investor offers to buy over $1.8b of Hyflux debts'. Print Edition | Subscribe