SINGAPORE: United Arab Emirates utility firm Utico has given distressed water treatment firm Hyflux two more weeks to consider its S$400 million investment offer and sign a “definitive agreement”.
The deadline is now Aug 16, "failing which, they will walk", WongPartnership lawyer Manoj Sandrasegara, who represents Hyflux, told the Singapore High Court during a case management conference on Friday (Aug 2).
AdvertisementAdvertisement[h=3]READ: Hyflux applies for another moratorium extension as talks with potential investors continue[/h][h=3]READ: From making waves to drowning in red ink - Hyflux, Tuaspring and how a business giant came undone[/h]The debt-laden firm, which has been under a court-supervised restructuring for more than a year now, was back in court as it sought another extension of its debt moratorium.
Speaking to reporters after the court hearing, Utico’s chief executive Richard Menezes said the company “reserve(s) the right” to walk away if a deal is not signed within two working weeks.
AdvertisementAdvertisement“But where we are standing now, we are just a millimetre away from signing. It depends on them,” he added.
Utico, which first signalled its interest in Hyflux back in May, announced the details of its S$400 million investment offer last month.
In the joint statement with Hyflux on Jul 11, both parties said they were “progressing” towards a deal that would see Utico take an 88 per cent equity stake in Hyflux for S$300 million as equity and S$100 million as a shareholder loan.
Utico also said it intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group, plus additional cash to the holders of Hyflux preference shares and perpetual securities.
On why discussions have taken so long, Mr Menezes cited fees for Hyflux’s professional advisers as among the sticking points.
“The longer it takes, the fees will go up,” he said.
There are also disagreements with Hyflux’s unsecured working group of financial creditors, although he noted that “the deal is agreed, except some language, monitoring and reporting structure”.
[h=3]READ: From making waves to drowning in red ink: Hyflux, Tuaspring and how a business giant came undone[/h]Founded in 1989, Hyflux made a name for itself with its proprietary membrane technology and was regarded one of Singapore’s most successful business stories, before a heavy reliance on borrowing and a failed venture into power generation hurt its finances.
The mainboard-listed firm sought court protection to reorganise its business and obligations last May.
Since then, its restructuring journey has been marked by twists and turns, including a rare public protest by retail investors and the sudden abortion of a deal with would-be white knight SM Investments in April.
As it continues its search for a new rescue investor to meet billions in liabilities, Hyflux sought for yet another extension of its debt moratorium on Friday.
It was hoping for a prolonged reprieve from creditors until the end of November, but was granted just two months until Sep 30.
This marks the fifth extension of Hyflux’s debt moratorium, which restricts creditors from taking actions against the company.
In making the decision, Justice Aedit Abdullah said: “I do expect to see more definitive agreements … before the next hearing date. But if neither occurs, I would see that would be difficult for me to extend any further but I will take the arguments at that point.”
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