Sias says it does not endorse any Hyflux rescue deal; urges Utico to address concerns

THE Securities Investors Association (Singapore), or Sias, does not plan to endorse the rescue offers for Hyflux put forth by potential white knights including Utico, Sias chief executive David Gerald said in a statement on Thursday.

He was responding to a July 29 statement by Utico, urging Sias to to endorse the Middle Eastern utility firm's proposed S$485 million cash-and-stock rescue package for Hyflux. The deal is currently the only offer on the table for retail investors holding Hyflux's perpetual and preference shares (PnPs).

"SIAS wishes to clarify that (its) role is to facilitate communication between the relevant stakeholders and the PnP holders, and to provide information to PnP holders on the various offers made, so as to enable them to make an informed decision when deciding whether to support any offer made by Utico or any other potential investor.

"It does not intend to endorse Utico's offer, or any of the other offers made by other potential investors such as Aqua Munda or Pison Investments based on the current terms," he said.

Mr Gerald also said that Utico has not satisfactorily addressed the concerns Sias raised on July 19, and that Sias urged Utico to do so promptly. "In order for the restructuring to go through, Utico needs to have a restructuring proposal that is acceptable to all the creditors and not just the P&Ps."

One key concern was that PnP holders will no longer be able to choose between an upfront and a deferred payment option. Instead,those classified as "small" PnP holders - those holding under S$10,000 in PnPs - are forced to take the upfront payment option. "Large" PnP holders, or those whose PnP holdings are S$10,000 or more, have to take a stock-only option.

In his July 19 statement, Mr Gerald said that the S$10,000 threshold is arbitrary and "may be prejudicial to the large PnP holders who would be forced to take the shares of Utico and Hyflux, without knowing the true value of these shares".

Sias' latest statement comes as a group of bank lenders are preparing to file an application with the Singapore High Court by Aug 7 to place Hyflux under judicial management.