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Court adjourns Hyflux's leave application for scheme meeting to March 10, extends moratorium
THE court has adjourned Hyflux's leave application to convene its scheme meeting to March 10, 2020. Before that, Hyflux’s lawyers will have to give an indication to the court of which are the groups of creditors that are likely to oppose the scheme.
Its moratorium will also be extended to April 30, 2020.
Nish Shetty, partner at Clifford Chance Asia, who takes over from WongPartnership in representing the embattled water treatment firm, stressed upon the tight timeline his team is working within to meet the long-stop date of May 26 this year that the parties have until to meet all the key conditions to complete potential white knight Utico's investment.
The four outstanding issues, particularly with the unsecured working group (UWG) of creditors, are financial and know-your-customer (KYC) due diligence, security documentation, proposed changes to the scheme, as well as professional adviser fees.
On the latter point, Mr Shetty said that Utico had indicated through a letter that the amount it is willing to put into the pot of adviser fees could be S$50 million instead of the original S$40 million, in which case the advisers involved could be paid “pretty much in full”.
Utico had previously said it would raise the pot for adviser fees to S$50 million if it receives the support from all advisers for the scheme and restructuring agreement at a court hearing on Jan 29, and that it would shrink it to S$30 million if the advisers fail to support the scheme at the hearing.
Mr Shetty added that at S$40 million, it would cover about three quarters of the adviser fees. “That’s not a bad position to be in,” he said, adding that Clifford Chance is still clarifying this point with Utico.
Eddee Ng, senior partner at Tan Kok Quan Partnership, who represents the UWG, said his clients are unable to state their position on the scheme until they have received the necessary documents required from Utico, especially pertaining to KYC and financial due diligence, and adviser fees.
The seven unsecured banks under the UWG include BNP Paribas, Mizuho Bank, KFW IPEX-Bank, Bangkok Bank and Standard Chartered Bank.
Just a day before the hearing, another suitor had emerged for Hyflux. The water treatment firm said on Wednesday that it had received a letter from Longview International Holdings expressing interest in investing in Hyflux with a joint venture (JV) partner, who is an "undisclosed major Chinese entity".
Separately, Utico also issued a press statement on Wednesday reiterating that it “will consider” paying holders of Hyflux's perpetual securities and preference shares a certain amount, referred to as a “soft landing”, even if the Emirati utility firm lists after two years from Hyflux’s restructuring.