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Hyflux’s UAE investor plans to meet retail investors, asks PUB to delay Tuaspring takeover

SINGAPORE: United Arab Emirates utility company Utico on Thursday (May 16) proposed to hold a town hall session for investors of Hyflux’s perpetual securities and preference shares so as to put together a “win-win proposal”.

In a statement issued to the media, Utico added that it has also requested national water agency PUB “to grant a delay in the takeover of the Tuaspring desalination plant”, which is scheduled to take place on May 18.

PUB, however, has told CNA that it is standing firm on the takeover.


Utico is the potential white knight which indicated its interest to invest S$400 million in embattled Hyflux last month. 

Over the weekend, Reuters reported that Utico had submitted a binding term sheet for its proposed investment but Hyflux clarified on Tuesday that all it got was a “draft term sheet”. 

READ: Commentary: Hyflux after the perfect storm

READ: ‘We have not lost faith’: Hundreds of Hyflux investors gather to express concerns at Hong Lim Park

Nevertheless, the UAE-based utility firm said on Thursday that it hopes to hold a town hall meeting for Hyflux’s perpetual securities and preference shareholders – a large group of 34,000 people, with a majority being retail investors – “in the coming days”. 

“We understand that the investors of Hyflux are the ones who will suffer the most,” said Utico’s chief executive Richard Menezes. 

“These junior unsecured, unguaranteed securities will get nothing when Hyflux is not performing nor is Hyflux obligated legally to pay them in current conditions. 

"This is compounded further if the company is either sold to funds, to investors seeking overseas assets or goes into judicial management,” the statement said. 

READ: Hyflux announces third potential investor, with letter of interest to acquire overseas assets 

READ: Hyflux says it could get as much as S$500 million from Oyster Bay Fund

Mr Menezes added that “a white knight investor cannot be an investor that only wants Hyflux and its assets or its businesses”. 

Instead, Utico wants to be the investor that seeks a “fair and quick resolution” with the holders of perpetual securities and preference shares. 

“We will discuss and put a solid proposal after we hear them out.  It is a fact that these investors are unsecured and/or any redemption or coupon must be a win-win deal,” the CEO said. 


This group of retail investors also contributed to the construction of the Tuaspring Integrated Water and Power Plant, as funds raised from Hyflux’s perpetual bonds and preference shares were channeled into this project, said Utico’s Mr Menezes.

As such, it was hoping to push back a scheduled takeover of the Tuaspring desalination plant by PUB and had sent in a request to the national water agency on Wednesday. 

“Hyflux is aware (of the request),” Utico told CNA.

By doing so, it hopes to enter into a transaction with Hyflux, "which would provide for remedial and rectification action of the plant to PUB’s satisfaction and goodwill".

It added that it understands Tuaspring’s status as a “strategic asset” and is “prepared to work with Hyflux to ensure it performs without compromising any security aspects”. 

The planned takeover followed PUB’s notice to Hyflux last month that it will terminate the water purchase agreement and seize the Tuaspring desalination plant at zero dollars. The termination notice provides a 30-day notice period, which will end on May 17 and pave the way for the takeover the day after.

In a reply to queries from CNA, PUB said: "We stand by all the announcements that have already been made about PUB taking over the Tuaspring Desalination Plant."

PUB previously said its decision was driven by the need to ensure water security, as Tuaspring has failed to keep the plant reliably operational as required. 

"The water purchase agreement will be terminated on May 17, 2019, and PUB will take over the Tuaspring Desalination Plant on May 18, 2019," the national water agency added.

When contacted, Hyflux said discussions with Utico are ongoing and declined further comment.

Source: CNA/sk(hm)


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