Aqua Munda extends debt buyout deadline on back of ‘significant additional concerns’ about Hyflux
SINGAPORE: Aqua Munda, the little-known investor looking to purchase about S$1.8 billion worth of Hyflux’s debts, has extended the deadline of its offer for the second time.
It is giving eligible creditors about three more weeks until 5pm on Feb 22 to submit their bids, Aqua Munda said in a press statement on Monday (Feb 3), citing “significant additional concerns” about Hyflux’s situation following a change of legal advisers at the embattled water treatment firm.
The surprise invitation from Aqua Munda to Hyflux’s noteholders and unsecured creditors was made in mid-December and opened in Dec 30. Last month, the expiration deadline for the offer was pushed back from the initial Jan 10 to Jan 31.
In announcing its second deadline extension, Aqua Munda said recent events, including the resignation of WongPartnership as Hyflux’s counsel and the resulting adjournment of the High Court hearing on Jan 29, “are understood to have raised significant additional concerns” around the company’s situation among eligible creditors.
Hyflux, in its bourse filing on Monday, acknowledged the press statement by Aqua Munda and said it would make appropriate announcements as and when there are further material developments on the matter.
Debt-laden Hyflux, a former market darling and one of Singapore’s most successful home-grown business stories, filed for a court-supervised financial restructuring in May 2018.
Its high-profile debt restructuring has since been marked by several unexpected developments – including a rescue plan which was aborted at the last-minute and a public protest by angry retail investors – with the latest being the company’s legal advisers from WongPartnership expressing their intent to resign from the case.
Citing a “loss of confidence”, WongPartnership said on Jan 29 that it had applied to the court to discharge itself from representing Hyflux.
Hyflux said later on the same day that “on its part, it has lost confidence and trust” in WongPartnership.
The next day, the company announced the appointment of Clifford Chance and Cavenagh Law as its new legal advisers.
In response to queries from the Singapore Exchange (SGX), Hyflux said on Jan 31 that with the appointment of a new legal team, the latest extension of its moratorium and the discharge of WongPartnership “will not have a material impact on the restructuring”, including its S$400 million deal with United Arab Emirates suitor Utico.
Regarding the latest development, media reports have cited issues "concerning assurances given in respect of adviser fees for the Securities Investors Association Singapore (SIAS)".
According to the Business Times, WongPartnership had assured the court that the fees that will be paid to the advisers engaged by SIAS were being safeguarded. However, there is now disagreement as to whether the fees have been safeguarded and whether Hyflux undertook such safeguards, the report citing sources close to the company said.
To that, SIAS said in a Jan 29 media statement that “all of its advisors have been fairly and adequately paid to date and there is assurance in place for their future payments for work to be done”.
After its latest court-granted extension, Hyflux’s debt moratorium will expire on Feb 28. Its next court hearing is scheduled on Feb 20.