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Hyflux and Utico lock horns over deadline for rescue deal

EMBATTLED water-treatment group Hyflux and one-time white knight Utico are at odds over whether last year’s restructuring agreement is still on the table, going by correspondence between the two parties released by Hyflux on Tuesday night.

Hyflux had sought “Utico’s urgent clarification” on whether Utico meant that its revised rescue offer was open for acceptance until June 30, or whether its revised offer was that the long-stop date under last year’s agreement was extended until that date.

Mr Menezes, chief executive of Emirati utilities group Utico, wrote in an e-mail dated Tuesday that the restructuring agreement from last November, which was to have expired at its long-stop date on May 26, was extended by a revised offer that Utico gave Hyflux in May and June.

Under the revised offer, Utico wants to tweak the terms of its rescue deal – including having all of Hyflux’s creditors take payment in Utico and Hyflux shares, rather than in cash.

An extension of the revised offer’s stipulated deadline of June 30 “can be considered after Hyflux board acceptance and creditors statement that they are ‘open’ for engagement to consider this proposition (sic)”, Mr Menezes said in his e-mail to Hyflux.

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Among other clarifications, he also said Utico will set the threshold at S$10,000 for “small investors” holding preference shares and perpetual securities (P&P), after Hyflux raised questions on issues such as Utico’s payment plans for P&P holders.

That is even as Hyflux independent director Lau Wing Tat, who heads the risk-management committee, stated in a letter to Mr Menezes on Monday the company’s position that the restructuring agreement “has ipso facto ceased and determined” already.

Though he told Mr Menezes that Hyflux is still weighing Utico’s revised offer, he also flagged coronavirus pandemic-related restrictions in Singapore that would preclude any physical scheme meetings needed to approve the revised offer.

Any extension must thus be longer than June 30, Mr Lau added.

The board has now said Hyflux “is considering the content” of the latest e-mail from Mr Menezes “and will be obtaining input from stakeholders on the same”.

“The company will make the appropriate announcements as and when there are any further material developments on the matters above,” it added.

Separately, a pre-trial conference for Hyflux’s reorganisation has been set for Thursday at 9.30am. Hyflux is under a debt moratorium that protects it from creditors until July 30.

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