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Hyflux white knight Utico proposes changes to adviser fees' pot
HYFLUX white knight Utico will raise the pot for adviser fees to S$50 million if it receives the support from all advisers for the Hyflux scheme and restructuring agreement (RA) at a court hearing set to take place on Jan 29, it said in a letter dated Jan 28 to the water treatment firm.
On the other hand, the pot would decline from S$40 million (as per the RA inked on Nov 26, 2019 with Hyflux) to S$30 million if the advisers fail to support the scheme at the hearing. Utico's own adviser fees are separate and do not come from the S$50 million pot, it clarified.
Middle Eastern utility provider Utico is offering a S$400 million rescue package to the beleaguered firm.
It added: "Securities Investors Association (Singapore) advisers will be treated in a special manner if their work and effort result in P&P (perpetual securities and preference shares) votes as and when necessary, considering they are a Junior Group and has Utico's special separate efforts."
The proposition around the adviser pot hinges on completing the scheme by April this year with the support of all advisers, Utico said in the letter.
Utico also said that it will not consider exercising its right to exit the RA as long as the scheme is supported by all advisers at the court hearing.
This comes as Hyflux's board of directors is understood to have already sent letters to all advisers with a minimum haircut of 25 per cent on all adviser fees. Some advisers are said to have rejected Hyflux's proposal and have stated that they will not support the scheme and the RA.
Under the RA, all adviser fees were due to be capped at S$40 million. That pot would have to cover a success fee of up to S$25 million payable to Hyflux adviser nTan Corporate Advisory if the restructuring is successful, according to Debtwire.
If an approved scheme with the support of all advisers is not received, "Utico cannot continue to commit to a process of a moving goalpost or a moving date for a company under moratorium with losing value and maintain the same valuation, payment terms and conditions, or the overall recovery to all stakeholders", Utico warned.