SINGAPORE: Hyflux’s high-profile debt restructuring seems to be hanging in the balance again after it said on Friday (May 29) that its S$400 million rescue deal with Middle Eastern suitor Utico has "ceased" with the lapsing of the long-stop date earlier this week.
The embattled water treatment firm said it remains in talks with Utico and is studying the latter’s revised offer to replace all cash considerations for creditors with stocks.
Hyflux, which is under court protection to restructure a mounting debt pile of nearly S$3 billion, signed the restructuring agreement with Utico on Nov 26 last year. The deal was to be completed within six months, that is May 26, or another agreed date by both parties.
But there “has been no such mutual agreement between the company and Utico to extend the long-stop date, which therefore remained as May 26, 2020”, according to the company’s bourse filing on Friday night.
“Accordingly, the restructuring agreement has ipso facto ceased and determined,” Hyflux said.
READ: Utico’s move to replace cash offer with stocks a ‘bombshell’ for Hyflux retail investors: SIAS
The deal with Utico was the embattled company’s second shot at restructuring but it has been met with several hurdles from the get-go, ranging from a drawn-out negotiation process and disagreements over the payment of adviser fees after the deal was signed.
The scheme meetings for creditors to vote on the deal had to be postponed because of the COVID-19 outbreak, and Hyflux has since sought an extended debt moratorium until end-July.
As the deal lapsed, Utico said this week it wanted to change the terms of the rescue deal, including to replace all cash considerations it had offered to creditors with Utico and Hyflux stocks.
This new offer, which Utico said is valid until Jun 4, means that retail investors of Hyflux’s perpetual securities and preference shares will be given 5 per cent of Utico and 12.5 per cent of Hyflux as payment. Previously, these investors would be able to opt for an upfront cash payment of up to S$1,500 or payment in installments.
The Securities Investors Association of Singapore (SIAS) on Thursday described this as a “considerably less favourable” offer and a “bombshell” for already-aggrieved retail investors.
READ: COVID-19: Hyflux gets green light from High Court to postpone scheme meetings, extend debt moratorium
Apart from Utico, Hyflux said on Friday it is concurrently pursuing other options, including those with other potential investors such as Aqua Munda, Longview and FCC Aqualia.
Aqua Munda is the little-known investor that came up with an offer in December last year to purchase about S$1.8 billion worth of Hyflux’s debts. It has since extended the deadline for its offer twice.
Singapore-based Longview International Holdings had expressed interest in investing in Hyflux together with a joint venture partner from China three months ago, while Spain-based water management company FCC Aqualia sent a letter of interest to Hyflux in March.
Hyflux will have its next case management conference at 10am on Jun 11.
“The company will make the appropriate announcements as and when there are any further material developments on the matters above,” it said in the bourse filing.