Sias says Utico made last minute changes to Hyflux rescue package, urges parties to conclude deal

The High Court on Sept 30 granted Hyflux a two-month extension on its debt moratorium until Dec 2. PHOTO: ST FILE

SINGAPORE - Securities Investors Association of Singapore (Sias) founder and CEO David Gerald said Sias is "seriously concerned that there is no finality yet on Utico's offer" for Hyflux.

In a media statement on Wednesday (Nov 20), Mr Gerald highlighted that while Hyflux and the various creditor groups have been working within the timelines set by the Singapore High Court to finalise a deal, "changes have been repeatedly introduced at the eleventh hour by the investor".

"Sias hopes that such strategies designed to achieve advantages for one party only would not be allowed to scuttle an outcome which could potentially benefit a great number of stakeholders, including the holders of the perpetual securities and preference shares," he said.

Sias "urged all parties, including Utico, to continue negotiations with a view to achieve a commercially acceptable outcome for all stakeholders involved, including in particular, the holders of the perpetual securities and preference shares".

The High Court on Sept 30 granted Hyflux a further two-month extension on its debt moratorium until Dec 2. A hearing is scheduled on Nov 29 to consider any further applications or extensions.

Hyflux and Utico, a Middle Eastern utility, had held talks ahead of a Nov 1 deadline for a rescue plan, with Hyflux's lawyer stating then that it was in talks with two other parties about potential investments in the water treatment firm.

Hyflux had said in May and June that it had received separate non-binding letters of intent for investments by Mauritius-registered Oyster Bay Fund and a Chinese power service provider. Back then, the firm had said that in addition to talks with Utico for a $400 million investment, it was also in talks with Oyster Bay Fund for up to $500 million.

The original proposed rescue package with Utico involved the Middle Eastern utility taking an 88 per cent stake in Hyflux through a $300 million equity injection for senior unsecured creditors, as well as a $100 million shareholder loan.

But Utico last month threatened to shrink its proposed $300 million equity injection to $200 million, saying delays in cloncluding a deal could have an impact on the bottom lines of both companies.

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