Aqua Munda invites eligible Hyflux creditors to sell debt at 85% discount or more

Singapore

AQUA Munda is inviting Hyflux noteholders and unsecured creditors to offer their debts for purchase at a minimum discount of 85 per cent.

The invitation begins at 9 am on Dec 30 and expires at 5 pm on Jan 23, 2020, unless extended or terminated earlier, the Singapore-registered company said in its invitation memorandum on Dec 27.

Eligible creditors are invited to submit bids for some or all of their debt, with a discount of at least 85 per cent on the offered debt.

All offers, once tendered, may not be amended or revoked before the acceptance deadline, "save as required by or agreed with the investor", said Aqua Munda in its invitation.

Aqua Munda has sole and absolute discretion to decide which bids to accept; but in general the bid with the highest offered discount will be accepted first, followed by the one with the next highest offered discount, and so on, until the available settlement funds are used up.

Aqua Munda said it will confirm the total available funds by Jan 18. The total principal amount of the eligible debt is about S$1.8 billion, representing nearly two-thirds of Hyflux's total S$2.8 billion debt.

In its Dec 28 Singapore Exchange filing on the invitation memorandum, Hyflux said it will make the appropriate announcements as and when there are any further material developments on this matter.

The invitation is open to holders of Hyflux's 4.25 per cent notes due 2018, as well as its 4.6 per cent and 4.2 per cent notes due 2019.

It is also open to holders of other senior unsecured debts, contingent debts, and trade and other debts of Hyflux and three of its subsidiaries: Hydrochem, Hyflux Membrane Manufacturing and Hyflux Engineering.

The purchase of eligible debt is contingent on various tender settlement conditions, including that founder and chief executive officer Olivia Lum enters into and does not breach a service agreement and a non-compete agreement, "each on terms that are satisfactory to the investor".

Another of the settlement conditions is for there to not have been any order or judgment, or any actions of proceedings pending before authorities that is either likely to be "materially adverse" to the group's business, or could be expected to pose an obstacle to the purchase of debt.

The acceptance deadline is March 23, or 60 days after the expiration deadline, whichever is earlier.

Separately, Aqua Munda had said on Dec 23 that it intends to engage with holders of Hyflux's perpetual securities and preference share (PnP) holders "as soon as practicable" after the close of this invitation.

Hyflux's 34,000 PnP holders are currently faced with two options under a S$400 million rescue deal, signed with Emirati utilities group Utico in November.

They can either get an upfront cash payment of S$1,500 or 50 per cent of their holdings, whichever is the lower; or receive the same amount over a period of two years, with an added 1.25 per cent interest per annum, with an additional payout from a S$50 million pool of cash, to be distributed on a pro rata basis.

Hyflux creditors, including the PnP holders, are to vote on this Utico deal at the upcoming meetings to approve the schemes of arrangement in March.