SINGAPORE: United Arab Emirates (UAE) utility firm Utico is buying an 88 per cent stake in Singapore-based water treatment company Hyflux for S$535 million, the Middle Eastern company said on Tuesday (Jul 16).
Utico said the deal is subject to various regulatory approvals, as well as approval from creditors, the Singapore Stock Exchange, investors and the court. Hyflux will remain as a separate-listed company, the statement added.
According to Utico, the equity valuation of the company is set at S$340 million though the total deal value could be S$535 million, higher than an earlier failed deal of S$530 million of SM Investments.
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“The aim is to save time and move expeditiously as both Utico and Hyflux, investors and creditors are aware of the fact that time is of essence in preserving the value of the Singaporean company and arrest further slide,” said Mr Richard Menezes, managing director of Utico.
Utico also intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group plus additional cash payouts.
This, according to Mr Menezes, could give Hyflux’s perpetual securities and preference (PNP) shareholders “50 per cent of their first S$2,000 to S$3,000 as well as a cascade and staggered deal to the rest, thus offering them options to exit and hope for full redemption”.
In its statement, Utico cited Mr Menezes as saying that the aim for both parties is “to enter into a definitive agreement on the proposed investment with the approval of senior creditors at the earliest and hold a town hall for both PNP and medium term note holders” before the next court hearing on Aug 2.
Last Thursday, the companies said that they had held "informal discussions" after the Jun 27 deadline and were heading towards a deal, subject to approvals from all stakeholders and definitive documents being finalised and signed.
Hyflux, whose year-long restructuring journey remains closely watched by tens of thousands of retail investors, said last month that it had held talks with seven suitors since it fell out with former white knight SM Investments in April.