Hyflux winding-up hearing adjourned after intervention by Utico

Singapore

WHITE knight suitor Utico is making a last-ditch attempt to intervene in Hyflux's winding-up process.

This follows a hearing before High Court Justice Aedit Abdullah on the winding-up application filed last month by Hyflux's judicial managers (JMs) from Borrelli Walsh after restructuring negotiations with potential investors had fallen through.

Justice Aedit had granted permission for Utico's draft affidavit to be circulated among creditors and adjourned Hyflux's winding-up hearing, which was initially set on Monday. A new date will be fixed in a pre-trial conference on Tuesday.

The Middle Eastern utility firm had, through its lawyers from Braddell Brothers, appealed to file an affidavit, which was said to refute what the JMs had asserted regarding the failure to proceed with certain negotiations for the restructuring, the Singapore High Court heard on Monday.

The court heard that it is in the "creditors' general interest" that Utico's affidavit is heard, and there is evidence that could impact whether Hyflux should wind up without further exploring options with Utico.

Justice Aedit pointed out that commercial judgments are generally left to the JMs, and Utico currently has neither a standing as a shareholder nor as a creditor.

Lawyers from Fullerton Law Chambers with the help of Senior Counsel Kenneth Tan were representing the JMs, and they said the deal with Utico was never pursued because there was insufficient evidence that they would be able to bring the deal to fruition.

Furthermore, Hyflux had been seeking investors even before it came under judicial management; and Utico was involved between April 2019 and November 2020, giving it ample time to obtain support from creditors.

This is not the first time Utico is making a bid for the company at the eleventh hour.

Just two days afer the winding-up application was filed in June, Utico's chief executive officer Richard Menezes made a surprise rescue bid for Hyflux.

But the JMs stated that Utico remained unable to meet the minimum conditions required to consider an offer, just as it was before their previous discussions were terminated.

"We are looking at an investor who is at this stage trying to upend the whole process after there have been extensive negotiations and even a conditional sale agreement signed with other bidders," said Mr Tan.

Keppel Infrastructure Trust (KIT) had entered into a conditional agreement to acquire the remaining 30 per cent stake it does not already own in SingSpring Desalination Plant from Hyflux for S$12 million, KIT's trustee-manager announced earlier this month.

The court also heard that Utico is willing to put up a S$10 million non-refundable deposit on Hyflux, but on the condition that it is given a period of 60 days to negotiate with the JMs on restructuring.

This was, however, dismissed by Judge Aedit as he was not assured by what was offered by Utico.

He said that he was willing to consider adjournment on those grounds if Utico had been able to put down money immediately for Hyflux's operations.

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