Third suitor surfaces for Hyflux assets

PUB will terminate the water purchase agreement with Hyflux tomorrow and take over the Tuaspring desalination plant, as well as shared infrastructure and related assets, on Saturday.
PUB will terminate the water purchase agreement with Hyflux tomorrow and take over the Tuaspring desalination plant, as well as shared infrastructure and related assets, on Saturday.ST FILE PHOTO

Investor, who was not named, is said to be one of world's top 10 largest desalination firms

The list of suitors is growing for Hyflux, with a third potential investor in as many weeks issuing a non-binding letter of intent for the assets of the embattled water treatment firm.

The investor, whose identity was not revealed, has shown interest in acquiring Hyflux's assets in Algeria and Oman, as well as those in the Middle East and North Africa region, in hopes of growing its own portfolio of desalination plants, Hyflux said in a Singapore Exchange announcement yesterday.

The investor, one of the world's top 10 largest desalination companies, also expressed interest in the operation and maintenance of those assets, Hyflux said.

Hyflux described the investor as a subsidiary of a global infrastructure company with expertise in transportation and greenfield infrastructure. Hyflux said the investor specialises in engineering, construction, operation and maintenance of water treatment facilities, in particular water desalination plants, with a focus on build-own-operate-transfer projects, management of concessions and related services.

The proposed deal is subject to regulatory clearance, due diligence and the execution of a binding agreement with terms to be mutually agreed upon.

The investor is "conscious of the timeline and has indicated that it would be willing to devote all necessary resources to ensure that the due diligence process and the consummation of the deal is carried out in the shortest possible timeframe", Hyflux said.

Hyflux said it will consider all serious offers and expressions of interest received, but the priority remains to find a strategic investor for the group.

Hyflux is concurrently engaged in active discussions with United Arab Emirates utility firm Utico and Mauritius-based multi-strategy investment firm Oyster Bay Fund.

The investor... has shown interest in acquiring Hyflux's assets in Algeria and Oman, as well as those in the Middle East and North Africa region, in hopes of growing its own portfolio of desalination plants.

Utico has offered to invest $400 million in Hyflux, which also said it "envisions" an investment of up to $500 million by Oyster Bay.

Meanwhile, Sembcorp Industries has said that it is keeping its options open for Hyflux's Tuaspring co-generation power plant.

"Naturally, if the price was right, this may be of interest to us," Sembcorp group chief executive Neil McGregor told The Business Times at Sembcorp's first-quarter results briefing yesterday.

Hyflux on Tuesday said that Maybank, Tuaspring's only secured creditor, had appointed Mr Timothy James Reid, a partner of insolvency and restructuring firm Ferrier Hodgson, and its executive director, Ms Theresa Ng Yau Yee, as receivers and managers, to take over the Tuaspring power plant.

This followed national water agency PUB's notice to Hyflux that the agency will terminate the water purchase agreement tomorrow and take over the Tuaspring desalination plant, as well as shared infrastructure and related assets, on Saturday.

A version of this article appeared in the print edition of The Straits Times on May 16, 2019, with the headline 'Third suitor surfaces for Hyflux assets'. Print Edition | Subscribe