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SIAS to hold independent engagement sessions for Hyflux PnP holders from March 23

THE Securities Investors Association Singapore (SIAS) is reassuring preference and preferential (PnP) holders that it is preparing to conduct its own independent townhall engagement sessions to help them understand the scheme proposed by Hyflux.

David Gerald, the association's founder, president and chief executive, said in a press statement on Thursday that this is meant to help the retail PnP holders make an informed decision when casting their vote.

Details on the upcoming sessions, which will commence from March 23, will be announced shortly, Mr Gerald said.

Mr Gerald also reiterated that the association and its advisers will remain independent, adding that they will not accept higher fees in exchange for encouraging PnP holders to accept the Utico deal.

The Middle Eastern utility provider, billed to be Hyflux's potential white knight, proposed raising the pool for advisers’ fees from S$40 million to S$50 million if all the advisors, including the SIAS advisers, support the Utico deal.

Utico is offering a S$400 million rescue package to the beleaguered water treatment company.

Meanwhile, SIAS also provided an update to the latest terms of the scheme proposed by Hyflux.

The first option remains to receive an upfront cash payment of S$1,500 or 50 per cent of their holdings, whichever is lower. However, once the payment for Option 1 is made, there will be no more further entitlement under the scheme, SIAS said.

The second option is a deferred payment option, under which PnP holders receive the same amount over a period of two years, with an added 1.25 per cent interest per annum. They will also receive an additional payout from a S$50 million pool of cash, to be distributed on a pro rata basis.

If Utico manages to list within two years of the completion of the Hyflux restructuring, the pro rata additional payout will come from the cash equivalent of a 4 per cent stake in Utico at the listing price or S$50 million, whichever is higher.

However, this further sum will be reduced based on the percentage of PnP Holders who choose the first option, SIAS noted.

In addition, it will only be paid in five equal instalments in the third and fourth years after the restructuring becomes effective.