Pison Investments has received a “significant” 158 tender applications from creditors to accept its bid for Hyflux, Indonesian magnate Johnny Widjaja’s investment entity said in a letter to the troubled water player dated Monday.
“We are very encouraged that a significant portion of eligible creditors have participated in the tender. Some of these tenders were submitted by established financial institutions and corporations (including major banks and multinational corporations),” said the letter, which was filed to SGX Tuesday.
Pison added it has continued to receive submissions of tender application forms even though the extended expiration date of 4 September has passed.
A few “significant” eligible creditors have also indicated they are in the process of obtaining board or management approval to submit applications, Pison said, adding it may further extend the expiration date.
Members of the unsecured working group (UWG), which is seeking to put Hyflux under judicial management, have not submitted applications and have declined to engage, Pison said. That group includes Mizuho, KfW, Bangkok Bank, BNP Paribas, Standard Chartered Bank, CTBC Bank and Korea Development Bank, according to a Business Times report.
Pison noted some of the tender applications are from eligible creditors holding Hyflux debt exceeding the holdings of some UWG group members.
In June, Johnny Widjaja expressed interest in investing as much as S$300 million ($220.3 million) in Hyflux as quickly as possible, and would also make S$100 million of working capital available to the company once he becomes the substantial shareholder.
Among other stipulations, Widjaja said the current management, including CEO Olivia Lum, must remain in place and no part of the group be placed in judicial management or liquidation.
Singapore-based Hyflux said at the time that Widjaja provided a letter from an Indonesian bank confirming he has the available funds, and the company would be engaging with him and his advisors over the offer.
Earlier in September, prior to publication of Pison’s latest letter, competing suitor Utico said Pison’s proposal didn’t contain clear plans to advance restructuring discussions until it completed its bid for Hyflux’s senior unsecured debt, which is being acquired in a reverse Dutch auction.
Utico added recovery for Hyflux’s more junior creditors would be higher than what is estimated under Pison’s bid.
Pison’s announcement marks the latest twist in Hyflux’s long restructuring saga.
Hyflux’s already turbulent straits worsened in late May when the company announced Utico’s S$400 million ($282.94 million) rescue deal had lapsed.
Hyflux said at the time that it remained in talks with Utico, the largest private full-service utility and developer in the Middle East; Utico’s offer has since been extended more than twice, with the current deadline set for mid-October.
Utico had revised its offer to change all-cash considerations into Hyflux and Utico equity, as well as changes to payments to creditors and advisors.
In lieu of the changes, Utico has offered to invest in Hyflux SPV in Oman and Algeria to rejuvenate the assets, with “time being of the essence.”
In a memo dated 4 June, which Hyflux filed to SGX, the water company said its medium-term noteholders planned to reject the revised offer because they wanted cash and not equity. The Securities Investors Association (SIAS) also continued to have concerns about the offer, Hyflux said.
Other stakeholders had not responded by the June 3 deadline, Hyflux said at the time.
In addition to continuing talks with Utico over the letter’s contents, Hyflux said in a previous announcement that it was also pursuing other options, including with Aqua Munda, Longview International and FCC Aqualia.
In March, Hyflux said FCC Aqualia, a Spain-based water-management company, sent a letter of interest for a potential transaction involving the company or its assets but did not provide further details.
Singapore-based holding company Longview, along with its unnamed Chinese joint venture partner, had expressed interest in investing in Hyflux in February.
Earlier this month, Aqua Munda, a Singapore-registered company that has offered to buy some of Hyflux’s noteholders and unsecured creditors’ debt, also sent a letter to the water company’s board saying it was “ready to provide no less than S$10 million of cash funding.” The funding would be a loan or on other terms to be mutually agreed, the letter, which was filed to SGX, said.
The expiration of the deal with Utico was another pothole in Hyflux’s long, rocky road towards finding a white knight investor.
The deeply indebted water player had filed for court protection from creditors in May 2018, after an oversupply of gas in Singapore resulted in depressed electricity prices, leading to losses for the company.
Hyflux’s unsecured debt load stands at nearly S$3 billion. Its rescue had seemed imminent after Hyflux reached deal with SM Investments, a consortium of the Salim Group and the Medco Group, in October 2018.
But in April 2019, Hyflux terminated the deal, saying it had “no confidence” SM Investments would complete the investment after it failed to provide a written commitment.
Late last year, Hyflux said it reached a deal with United Arab Emirates-based utility Utico FZC to provide the Singapore company with an investment of S$300 million and a S$100 million loan in exchange for an 88 per cent stake.
However, the scheme meetings – where Hyflux’s creditors vote on the proposed scheme of arrangement as contemplated under the Utico Restructuring Agreement – originally scheduled on 22 and 23 April 2020 had to be vacated due to regulations imposed in light of the COVID-19 pandemic.