Singapore—While reports emerged that United Arab Emirates-based utility Utico had already struck a restructuring deal with beleaguered water-treatment firm Hyflux on Wednesday, August 28, Hyflux hastened to clarify by the evening of that day that a definitive agreement with the Middle Eastern company had not been entered into quite yet.
The water treatment firm said that the agreement was still pending due to “certain final outstanding issues,” according to a statement from the company.
Utico had earlier announced that the two companies had already “signed and released” an agreement for restructuring.
Hyflux responded to this in a statement released before midnight on August 28 saying, “The company and Utico are however in highly advanced discussions and will continue to engage with each other with a view to resolving such final outstanding issues and finalising and entering into the definitive agreement as soon as possible.”
Utico had announced earlier that the restructuring deal “finds a resolution” for creditors and PNP investors as well as projects intended for the company’s development which have been “languishing since the moratorium” that went into effect in May 2018.
“The deal finds a resolution for creditors and PNP (perpetual and preference shareholders) investors and development projects that have been languishing since the moratorium in May 2018.”
“With the support of Hyflux Board and management, swift action will be taken to bring all projects up to speed as well as take on new projects.”
Hyflux announced on August 16 with regards to the deadline Utico had set on August 26, 2019, for the Company to enter into a definitive agreement with UAE firm, “The Company wishes to update that as negotiations with Utico is the most advanced amongst all the potential investors, the Company intends to engage exclusively with Utico from now until 26 August 2019.
The Company and its advisors will negotiate diligently with Utico with a view to entering into a definitive agreement by 26 August 2019. The Company will make the appropriate announcements as and when there are any further material developments on these matters.”
On July 16, Utico announced that it would buy an 88 percent stake in beleaguered water treatment firm for the amount of S$535 million.
Back then, the utility firm said that the agreement was subject to several regulatory approvals, and also the approval from creditors, the court, investors and the Singapore Stock Exchange. The statement also said that Hyflux will continue to be a company that’s separately listed.
Utico also bared its plan of offering the cash equivalent of a four percent stake in the enlarged Utico group, along with additional cash payouts, which should give the perpetual securities and preference (PNP) shareholders of the water treatment company “50 percent of their first S$2,000 to S$3,000 as well as a cascade and staggered deal to the rest, thus offering them options to exit and hope for full redemption,” Richard Menezes, the managing director of Utico, said. -/TISG