SINGAPORE: Hyflux late on Friday (May 3) revealed United Arab Emirates utility company Utico FZC as the new white knight that could give it a potential S$400 million lifeline.
Last week, the embattled water treatment firm said it had received a non-binding letter of intent from a Middle Eastern water and power utilities developer-owner with a “reputable track record”. The funds, it had said, would be used for equity and working capital purposes, as well as possible urgent interim funding.
In the late-night announcement on Friday, Hyflux described Utico as the largest private full-service utility and developer in the Middle East that counts sovereign institutions from Oman, Saudi Arabia, Bahrain and Brunei as its shareholders and investors.
Hyflux said the investor “is aware of the urgency of the restructuring” and intends to invest “on a win-win basis”.
Utico plans to keep Hyflux’s key entities “intact and operational”, retain the group’s current management and reach “an amicable deal” with creditors and investors, according to the announcement.
Hyflux said its legal and financial advisors are “currently engaged in active discussions” with Utico to work out a binding term sheet for the potential investment.
Meanwhile, it remains in “concurrent discussions with several other parties” that are interested in investing its business, the company added.
READ: Singapore regulators reviewing disclosure issues, accounting practices at Hyflux for potential breaches
This marks the latest development in Hyflux’s high-profile debt restructuring, which started last May and has since been marked by unexpected twists and turns, such as the termination of a key rescue deal last month.
The U-turn in the deal with Indonesian consortium SM Investments, coupled with national water agency PUB saying that it will take over Hyflux’s Tuaspring desalination plant, left the company hanging by a thread with analysts raising the odds of a liquidation.
Last week, the home-grown company managed to convince the court to grant it another moratorium extension and Hyflux now has until May 24 to sort out its woes.