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Hyflux inks S$400m rescue deal with Utico
WATER treatment firm Hyflux on Tuesday entered into a restructuring agreement with white knight Utico for a S$400 million rescue package.
Under the deal, the Middle Eastern utility firm will subscribe for new Hyflux shares representing 95 per cent of the enlarged capital for a total amount of S$300 million, via private placements.
Utico will also grant a working capital line of a principal amount up to S$100 million to Hyflux, subject to the terms and conditions of an agreement to be entered into between the parties.
The debt-laden Singapore firm will seek the court’s leave to convene the meetings of creditors to approve the schemes of arrangement.
Under the schemes, the unsecured creditor group will be paid S$250 million pro rata.
Meanwhile, each holder of Hyflux preference shares and perpetual securities (PNP) can choose from two options under the schemes.
The first option is to receive an upfront cash payment that is the lower of S$1,500 or 50 per cent of their holdings each. The total principal amounts payable under this option will be capped at S$50 million.
The second option for PNP investors is to receive a cash amount that is the lower of S$1,500 or 50 per cent of their holdings each, but the latter will be paid out over two years in five equal instalments with a yearly interest of 1.25 per cent.
PNP investors who choose the second option will also receive an additional cash payout. If shares of Utico or an affiliate are listed within two years of the transaction’s completion date, this additional payout will the higher of either the cash equivalent of 4 per cent of issued shares at the listing price or S$50 million. If such listing does not occur within the two years, the additional payout will be S$50 million.
A circular will be despatched to Hyflux shareholders in due course.
The embattled water treatment firm is undergoing a court-supervised process to reorganise its liabilities and businesses.
Its debt moratorium granted by the court is in force up to Dec 2 this year.
Based in the United Arab Emirates, Utico develops water and power infrastructure in the Middle East region. The firm was identified by Hyflux through a new investor search process which began after an earlier rescue deal by SM Investments fell through.