Some of Hyflux's creditors may be able to get up to 15 per cent back on their investments in the embattled water treatment firm.
Singapore-registered firm Aqua Munda, which floated a proposal to buy over some of Hyflux's creditors' debts last week, said in its invitation memorandum last Friday that it is looking at a minimum 85 per cent discount on the debts.
The option to tender is open to holders of Hyflux's 4.25 per cent notes due last year, 4.6 per cent notes and 4.2 per cent notes due this year, as well as other senior unsecured, trade and contingent debt of the water treatment firm and three of its subsidiaries.
Aqua Munda said the purchase price of the debts will be determined using a reverse Dutch auction approach, where the bids offering the highest discounts will be accepted first, until a set pool of funds has been completely used up.
It will determine which bid to accept should multiple bids be submitted at the same price and the pool of cash be insufficient to accept all the bids, at its own discretion, the investor added.
The total amount of funds it has allocated to buy over the debts will be disclosed by Jan 18, Aqua Munda said.
Creditors' offers may not be amended or revoked prior to or on the acceptance deadline unless required by or agreed with Aqua Munda, and the investor has the sole and absolute discretion to "reopen, terminate and/or extend the expiration deadline of the invitation".
It has no obligation to accept offers, the investor said, and added that it will act on behalf of those whose bids they have accepted at meetings.
This includes exercising voting rights.
The invitation opens tomorrow and expires on Jan 23, "unless the period for the invitation is extended or terminated earlier", Aqua Munda said.
Results of the tender will be announced no later than 60 days after March 23, it added.
Hyflux said in a bourse filing yesterday that the company will make "appropriate announcements as and when there are any further material developments on this matter".
Aqua Munda is a special-purpose vehicle managed by Rain Asia Pacific, the memorandum stated.
Rain Asia Pacific's fund manager and investment adviser is StormHarbour.
The firm, which states its registered business activities as the "manufacture of water treatment, waste treatment and oilfield chemicals", sent an invitation notice to Hyflux on Dec 17 stating its intention to buy out debts held by Hyflux's note holders and unsecured creditors that are estimated to be about $1.8 billion.
The invitation does not extend to Hyflux's 34,000 perpetual securities and preference shares holders who are owed around $900 million.
Aqua Munda said in a statement last Monday that it intends to engage with Hyflux's perpetual securities and preference shares holders through the Securities Investors Association (Singapore) and its advisers "as soon as practicable" after the current invitation to note holders and senior creditors has closed.
Hyflux's debt moratorium has been extended to the end of next month, with the next court hearing scheduled for Jan 29.