Would-be Hyflux white knight Utico plans to list in Singapore

The Hyflux Innovation Centre in Bendemeer Road.
The Hyflux Innovation Centre in Bendemeer Road.PHOTO: ST FILE

The Middle Eastern utility company that is lining up a rescue deal to save embattled water treatment firm Hyflux is planning to list here.

Utico hopes to raise $300 million to $500 million in an initial public offering, chief executive Richard Menezes told The Straits Times via e-mail yesterday. He added that the United Arab Emirates-based company is looking to invest in water, renewables and high-tech sectors here, without going into specifics.

Utico has made headlines as one of Hyflux's potential white knights with plans to acquire an 88 per cent stake in the firm, according to media reports. Hyflux and Utico told the Singapore Exchange earlier this month that they were progressing towards a $400 million binding deal. The amount includes an investment of $300 million as equity and a $100 million shareholder loan.

Mr Menezes had previously said the investment would place both Hyflux and Utico in a stronger position with their joint capabilities.

Home-grown Hyflux fell on hard times when it overestimated the ability of its integrated water and power plant, Tuaspring, to turn a profit.

Tuaspring, the first water plant in Asia to be integrated with power generation capabilities, cost Hyflux $1.05 billion in all. But it has been a drag on earnings since it began operations in March 2016. National water agency PUB has since taken over the desalination plant.

Hyflux's troubles centre on its expansion into the energy business through Tuaspring, where profits from the power plant were to have been used to subsidise the desalination facility's operational costs. But electricity prices plunged and, coupled with operating losses from the desalination plant, caused Hyflux to sink into debt.

A version of this article appeared in the print edition of The Straits Times on July 26, 2019, with the headline 'UAE-based Utico plans to list in Singapore'. Subscribe