SINGAPORE - The High Court on Monday morning (Sept 30) allowed debt-ridden water treatment firm Hyflux two more months of reprieve from its creditors - until Dec 2 - as the company continues to work with Utico and some unidentified investors to nail down a restructuring plan.
This is after Hyflux and its three subsidiaries asked for yet another two-month extension after the previous extension deadline expired on Monday morning.
In arguing for yet more time to nail down a rescue plan, Hyflux claims there are other investors that have shown interest, even as the proposed deal with Middle Eastern utility Utico remains a front runner.
As of Monday morning, there was still no restructuring deal signed by all parties despite Hyflux chief executive Olivia Lum stating in a May 27 affidavit that if all goes according to plan, the scheme meetings will be held in late August, and the court-sanctioned restructuring process will be completed in September.
Objecting to Hyflux's request for the two-month extension is Mr Eddee Ng, a senior partner at Tan Kok Quan Partnership, who represents a group of banks that is collectively owed $648.7 million.
The Securities Investors Association (Singapore) or Sias, on Sunday said it supports another two-month extension on the debt moratorium to facilitate Hyflux's negotiations with Utico, with a view to finalise and execute the proposed restructuring agreement.
If a deal with Utico cannot be reached, the extension would also facilitate Hyflux in pursuing discussions with other interested investors, Mr David Gerald, founder and chief executive of Sias, said.
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. In addition, Utico intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group plus additional cash to PNP investors.
But there is still no deal signed by all parties as Utico claimed that advisers' fees, board representation and management oversight, have "remained the key gap items even till today". Hyflux said that parties had yet to resolve "final outstanding issues" in the draft agreements.
In May this year, Hyflux and three of its subsidiaries asked for a four-month extension on its debt moratorium, saying it was in discussions with other potential investors.
Back then, the firm had said that in addition to talks with Utico for a $400 million investment, it was also in talks with Mauritius-based investment fund Oyster Bay Fund for up to $500 million. A third investor, said to be a large desalination company, had issued a letter of interest for certain assets in Algeria, Oman, the Middle East and North Africa.
Four more companies were also in discussions over a potential investment. They were a large power sector player in Asia looking to merge with Hyflux group, a fund whose corporate strategy included turning around distressed firms, a major Asia-based nuclear and civil engineering contractor, and a major waste treatment player.