SINGAPORE (July 11): Hyflux says it has had informal discussions with United Arab Emirates utilities group Utico FZC, even after the extended deadline for entering into a binding agreement lapsed on June 27.
The debt-ridden water treatment firm earlier announced had received a non-binding letter of intent from Utico for a possible $400 million injection to be used for equity and working capital purposes as well as possible urgent interim funding.
The proposed investment will see Utico invest in an 88% stake in Hyflux for an investment amount comprising $300 million as equity and $100 million as a shareholder loan.
Utico has also informed Hyflux that intends to offer the cash equivalent of a 4% stake in the enlarged Utico group plus additional cash to the holders of preference shares and perpetual capital securities.
See: No binding agreement with potential investor Utico yet: Hyflux
In a joint statement on Thursday, Hyflux and Utico say they are “cognisant of time being of the essence to preserve value”.
“The parties are now progressing towards a deal subject to approvals from all stakeholders and definitive documents being finalised and entered into,” the statement added.
Hyflux and Utico say they have been actively engaged in discussions over the past few weeks, including face-to-face meetings.
Over the past two days, they have also met with representatives of various stakeholder groups to discuss the proposed investment for an agreement.
See: Potential investor interested in Hyflux's overseas assets
Had the binding agreement been sign by the June 27 deadline, Hyflux was supposed to hold a town hall meeting with its perpetual securities and preference shareholders this week.
The Singapore High Court had allowed Hyflux’s debt moratorium to be extended to allow the troubled water treatment company to postpone debt payment even as creditors of the work on another plan to avoid liquidation.
This came after the previous rescue deal agreed upon between Hyflux and white knight investor SM Investments collapsed at the last minute.
See: Hyflux applies to extend debt moratorium by another three months; slapped with fresh claims of US$65 mil
