Hyflux in continued talks with potential investors, says Utico’s $294m offer not binding

People gather during a protest on Hyflux Ltd. debt restructuring plan in Singapore on March 30. Photographer: Bryan van der Beek/Bloomberg

Embattled water treatment firm Hyflux Ltd has clarified that the offer made by Middle Eastern utility firm Utico FZC to its small investors is not binding as the Singapore company continues to talk to several other potential investors.

In a statement to the Singapore Exchange, Hyflux said the discussion at a meeting attended by its representatives and those of Utico and the Securities Investors Association was focused on “high-level views” which entailed no conclusive number or percentages, or any binding agreement.

Hyflux said the statements issued by Utico to the press are exploratory in nature. “The company had not accepted or entered into the term sheet received from the advisors of Utico on 6 May 2019. This position has not changed,” the Singaporean utility firm said.

The company earlier said it received another non-binding letter of intent for an investment worth S$500 million ($364 million) from Oyster Bay Fund Ltd.

Hyflux made the clarification after Utico FZC offered part cash redemption and “hope for full redemption with a plan and exit option” to small investors if they support the white knight investor’s S$400-million ($294 million) offer.

“Full details can only be revealed later, but as part of the overall deal, small investors of up to S$2,000 to S$3,000 could get 50 per cent cash redemption along with full redemption opportunity while the rest of the investors could get a similar but staggered and cascade deal,” Utico chief executive Richard Menezes said in a statement on Sunday.

Menezes said that all investors will have an opportunity to get their money back as a plan if they support the deal.

“This was offered to perpetual securities and preference (PNP) shareholders and not to senior creditors who are taking a haircut, since they took an active business risk with ringside view, whereas PNP investors took a passive blind faith risk,” he added.

Once lauded as a national champion running a strategically important water source for the city-state, Hyflux is now under a court-supervised restructuring process that could wipe out the holdings of tens of thousands of retail investors.

Utico, based in the United Arab Emirates, is the largest private full-service utility and developer in the Middle East. Its shareholders and investors include the governments of Oman, Saudi Arabia, Bahrain, and Brunei.