New Hyflux investor floats offer for debts

Singapore

A NEW investor has come calling on beleaguered water cleaning company Hyflux, making an offer disclosed on Tuesday night to buy over some of its creditors' debts.

The fresh face - Aqua Munda, a Singapore-registered firm - is dangling its offer to holders of Hyflux's 4.25 per cent notes due in 2018 and 4.6 per cent notes and 4.2 per cent notes due in 2019, as well as to unsecured creditors of Hyflux and three of the company's subsidiaries.

Unsecured creditors of Hyflux and the subsidiaries - Hydrochem, Hyflux Membrane Manufacturing, and Hyflux Engineering - include those holding contingent and trade debts.

According to the invitation notice that was sent to Hyflux, Aqua Munda has estimated that these debts together come up to about S$1.8 billion, including contingent liabilities.

Eligible creditors can tender for the investor to buy over the debts between Dec 30, 2019 and Jan 10, 2020 - although Aqua Munda said it can change the deadline - with a more detailed memorandum to set out the terms and conditions by Dec 27.

"For the avoidance of doubt, the investor retains the right in any event to choose not to accept any or all of the offers tendered by the eligible creditors," Aqua Munda added in its letter. It said it would give more information on proof of funds "in due course".

Aqua Munda - which corporate records show was set up in 2019 and is owned by Singaporean businessman Bambang Sugeng Kajairi - is being advised in this transaction by Duff & Phelps in Hong Kong.

Aqua Munda is registered to an address in Ocean Financial Centre, and lists its principal activity as "manufacture of water treatment, waste treatment, and oilfield chemicals".

The firm's offer is the latest twist for Hyflux, which finally signed a S$400 million rescue deal with Emirati utilities group Utico last month.

It had named Utico as a new white-knight candidate in May, after talks with Indonesian consortium Salim-Medco broke down. Other potential investors that had reportedly made non-binding letters of intent were Mauritius-registered Oyster Bay Fund and a Chinese power service player.

But the restructuring pact did not end months of back-and-forth between Hyflux and Utico, as some lenders supposedly came out against the success fee payable to Hyflux adviser nTan Corporate Advisory. If parties cannot agree on payments, Utico may scupper the deal.

Hyflux's creditors - which also include holders of its perpetual securities and preference shares - must vote on the Utico deal too.

Hyflux said of the latest offer, in its bourse filing on Tuesday, that it "will make the appropriate announcements as and when there are any further material developments".