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Hyflux receives formal expression of interest from US fund manager to invest S$204.78 million
BELEAGUERED Hyflux has received a formal expression of interest from an American fund manager to invest at least S$204.78 million.
The water treatment company said this in a regulatory filing two days before the High Court hears the judicial management application by the group's unsecured working group of banking creditors.
Hyflux separately said that as at 9pm on Monday, it has received 100 letters from various creditors of the group which oppose and object to the judicial management application, and support instead the group's applications for a further two-month extension of the moratoria.
The water treatment firm said in July this year that a then-unnamed North American fund manager with a "strong" track record of investing in infrastructure, technology and real estate globally, was keen to invest. This was according to a letter from transaction advisory and strategy consulting firm The Spectrum Solutions Group, which represents this fund.
The fund has now revealed itself to be Delaware-based Strategic Growth Investments (SGI), which on Monday proposed formally that the funds to be injected as newly issued common equity into Hyflux, and to be applied to settle all debts, claims and liabilities of the group.
Senior unsecured creditors will get the lion's share of S$97 million, trade creditors S$15.78 million and the perpetual securities and preference shares (PnP) investors S$32 million - all on a pro-rata basis, proposed SGI.
Also, it was proposed that S$60 million from the investment to be set aside for working capital and any future corporate restructuring, based on the value creation plan designed and implemented with SGI's advisers.
Hyflux's latest suitor SGI is prepared to offer up to 15 per cent of the equity in the treatment company post-investment in the form of warrants, with 5 per cent of the equity going to the senior unsecured creditors and 10 per cent to the PnP holders.
With the assumption of the successful implementation of SGI's value creation plan, the value of the equity warrants could be worth about S$196.7 million for the senior unsecured creditors and S$393.3 million for the PnP holders, according to expression of interest letter.
According to SGI, its principals have invested in, owned and created value for various companies across several verticals, including technology, industrials and manufacturing, infrastructure as well as energy.