The Securities Investors Association (Singapore), or Sias, in a statement yesterday clarified that it does not, in fact, support the Hyflux restructuring agreement by potential white knight Utico at this stage as previously reported.
This comes as the terms of the restructuring agreement have not been agreed upon by the relevant parties and are pending resolution on certain final outstanding issues, wrote Mr David Gerald, founder and chief executive of Sias.
Instead, Sias' support is for the two-month extension for the debt moratorium which Hyflux is seeking to facilitate negotiations with Utico, with a view to finalise and execute the proposed restructuring agreement. If a deal with the Middle Eastern utility firm cannot be reached, the extension would also facilitate Hyflux to pursue discussions with other interested investors, he wrote.
Previously, Hyflux and three of its subsidiaries had requested the court to extend its debt moratorium by another two months until November. The applications will be heard in court today, when the previous extension expires.
Utico's proposed rescue package will see it take an 88 per cent stake in Hyflux through a $300 million equity injection and a $100 million shareholder loan.
Sias also clarified that the result of a poll from a small group of Hyflux's perpetual securities and preference (PNP) holders, after a focus group meeting organised by the association on Aug 1, is not binding.
This is because the focus group represented only a very small sample size of the PNP holders and cannot be taken to be representative of the views of all the PNP holders. More than 77 per cent of the attendees of the focus group meeting had approved Utico's offer.
Utico responded swiftly yesterday evening to the Sias statement, questioning its intent as well as why the investor advocacy group is not asking Hyflux to stop "value leakage".
Last Friday, Utico had claimed that Hyflux's board and its advisers have "refused" to guarantee that they will stop any "leaking of value" in the event that the extension is granted by the court.
Yesterday, Utico said that its affidavit is ready for submission by this morning if Sias or any other creditor supports its presentation. It is also ready to offer testimony of Utico's negotiations with Hyflux starting from its offer and entry in mid-April, if the court requests it.