Hyflux says it has ‘not accepted or entered’ into binding agreement with UAE’s Utico

Hyflux says it has ‘not accepted or entered’ into binding agreement with UAE’s Utico

Hyflux Singapore
(Photo: Jeremy Long)

SINGAPORE: Hyflux on Tuesday (May 14) said it “has not accepted or entered” into a binding agreement with United Arab Emirates utility company Utico, the potential white knight which reportedly submitted an investment offer two days ago. 

Clarifying media reports on that, the embattled water treatment firm said in a bourse filing that Utico only submitted a “draft term sheet”, and that investment terms are still being finalised.

A Reuters report on Sunday said Utico submitted an offer for a binding agreement to invest S$400 million in Hyflux, and will provide working capital and any urgent interim funding as part of the offer.

In a filing to the Singapore Exchange on Tuesday afternoon, Hyflux said it only received a “draft term sheet” from the advisors of Utico on May 6.

While it has been informed that this draft “is to be regarded as a binding term sheet”, Hyflux said it “has not accepted or entered” into a binding agreement on the offer.

Advisors of both companies remain in “active discussions … to finalise the proposed terms of Utico's investment”, the company added.

Concurrently, Hyflux said it is in talks with Oyster Bay Fund – the global multi-strategy investment fund that was revealed last week as the second potential white knight mulling a potential investment of up to S$500 million.

Once a star company, Hyflux has been under a court-supervised restructuring process since last May. The process has been marked by twists and turns, such as a protest by distressed retail investors and the termination of a key rescue deal with Indonesian consortium SM Investments.

The latter left the company hanging by a thread, with analysts raising the odds of a liquidation. Since then, Hyflux has been seeking fresh funds, as well as convincing the Singapore court to grant it another debt moratorium extension, to stay alive.

The filing on Tuesday also announced that Maybank has appointed Timothy James Reid and Theresa Ng from Australian financial advisory and restructuring provider Ferrier Hodgson as receivers and managers over the assets of the Tuaspring Integrated Water and Power Plant, except for the desalination plant and shared infrastructure. 

Last month, Maybank, the only secured creditor of Hyflux’s unit Tuaspring, terminated a collaboration agreement relating to the divestment of the Tuaspring integrated plant, and had announced its intention to appoint receivers and managers over the facility’s remaining assets. 

This came on the back of national water agency PUB’s notice to Hyflux on Apr 17 that it will terminate the water purchase agreement and take over the Tuaspring desalination plant.

The termination notice to Hyflux’s subsidiary Tuaspring provides a 30-day notice period which is expected to end this week.

Source: CNA/sk

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