Hyflux white knight Utico says it has signed rescue deal

Utico had earlier agreed to take an 88 per cent stake in Hyflux through a $300 million equity injection and a $100 million shareholder loan, and is engaging with Hyflux's creditors to work out the details of the rescue plan.
Utico had earlier agreed to take an 88 per cent stake in Hyflux through a $300 million equity injection and a $100 million shareholder loan, and is engaging with Hyflux's creditors to work out the details of the rescue plan.PHOTO: ST FILE

SINGAPORE - Utico said on Tuesday morning (Aug 27) that it had "signed and released" a restructuring agreement with Hyflux on Monday which will give it 88 per cent of the debt-laden water treatment firm.

"The deal finds a resolution for creditors and PNP investors and development projects that have been languishing since the moratorium in May 2018," the United Arab Emirates utility firm said in a statement hours after midnight.

Utico added that with the support of Hyflux's board and management, "swift action" will be taken to bring all projects up to speed, as well as take on new projects. 

It did not give any details of the agreement signed.

Hyflux, when contacted by The Business Times, said that an announcement would be made in a filing with the Singapore Exchange. 

The troubled water firm on Aug 16 said it would engage exclusively with white knight Utico until Aug 26 as its negotiations were the most advanced among all potential investors. This was also the deadline for the company to enter a definitive agreement with Utico for the latter's intended investment in the group.

Utico had earlier agreed to take an 88 per cent stake in Hyflux through a $300 million equity injection and a $100 million shareholder loan, and is engaging with Hyflux's creditors to work out the details of the rescue plan.

Once a home-grown success story, Hyflux collapsed last year under the weight of a debt pile of nearly S$3 billion, forcing it to seek court protection and embark on a search for a rescuer that has taken many twists and turns. Its flagship Tuaspring desalination plant was taken over in May this year by PUB. 

About 34,000 small investors who bought the company's perpetual securities and preference shares are owed a total of $900 million. Utico chief executive Richard Menezes had said in May that the firm was offering these investors "part cash redemption and also a hope for full redemption with a plan and exit option".