SINGAPORE (THE BUSINESS TIMES) - Utico has extended the deadline for Hyflux to accept its proposed rescue package by 1 ½ months to Oct 15, Hyflux said in a filing to the Singapore Exchange on Wednesday night (Sept 9).
The water treatment company, attaching a letter it received from Utico on Wednesday about the decision, said it should not be taken to be endorsing, confirming or agreeing with Utico and/or any part of the letter.
In the letter, Utico said that Hyflux did not accept its offer by the deadline of 5pm on Aug 30, nor had it requested for an extension. However, shareholders have requested that Utico extend the deadline because they feel Utico's offer is "the only viable restructuring plan for Hyflux and has the highest recovery available".
Utico also referred to an e-mail from Hyflux on Tuesday, which requested that the Emirati utilities group revise or adjust its terms to achieve the best possible outcome for creditors. As a result of these requests, Utico decided to extend the period for acceptance.
Utico in July revised its rescue package for Hyflux, promising a bigger return to creditors. It upped its offer to a minimum of $485 million comprising cash and stock.
Under the latest proposal, the return to both the unsecured senior creditors and the retail investors of Hyflux’s preference shares and perpetual securities (PnP) will be “more than 10 per cent” higher than what had been available under the restructuring agreement inked on Nov 26 last year, Utico said.
Hyflux has about 21,000 small PnP holders, as well as 12,000 to 13,000 larger PnP holders, who are owed some $900 million in total.
Meanwhile, an unsecured working group (UWG) of bank lenders filed last month to place Hyflux under judicial management. The UWG want to carve their respective shares of debt out of Hyflux’s debt moratorium, arguing that it can no longer trust Hyflux’s management to lead any restructuring effort.
Utico has said that its rescue offer is on the table whether or not Hyflux is placed under judicial management.