Hyflux in waiting for their white knight, Utico, to put down $10million deposit as confirmation of restructuring plan

Singapore — The plan from judicial managers for the liquidation of embattled water treatment firm Hyflux may yet be avoided, provided the company’s would-be white knight puts its money where its mouth is.

Utico, a Middle Eastern utility company, has been floated as a possible rescuer that would infuse some much-needed cash into beleaguered Hyflux since 2019, but so far, this has yet to happen.

On Tuesday (Jul 13), it was reported that Utico is willing to put up a S$10 million non-refundable deposit as long as it has 60 days to negotiate concerning restructuring Hyflux’s debts with the judicial managers.

And now, it seems that the Securities Investors Association Singapore (SIAS), is taking Utico at its word, at least concerning the money it says it’s willing to put down.

SIAS is requesting for the Middle Eastern firm to put $10 million as a non-refundable deposit into either Utico’s solicitor’s account or an escrow account by 10 o’clock on the morning of next Wednesday, Jul 14.

This would indicate that its plans to restructure Hyflux are solid.

Mr David Gerald, the president and chief executive officer of SIAS, wrote a letter yesterday (Jul 15) to Utico that said SIAS would need concrete proof as well as a credible restructuring proposal from it.

This would enable SIAS to gather support for the judicial management order of Hyflux to be extended as its next hearing is also scheduled for that day.

Therefore, it’s important for Utico to put the funds in by that date so that the money can be released to Hyflux as soon as the judicial management order is given an extension by the court. 

SIAS says the Middle Eastern firm can put limits on the usage of the amount, including saying it needs to be used as working capital based on Utico’s restructuring proposal or saying it cannot be used to pay advisers, judicial managers or their lawyers.

In addition to the non-refundable deposit, SIAS is also asking Utico to give an undertaking, by Jul 31, that includes a term sheet for the proposed restructuring as well as details for a timetable for the water treatment’s creditors to receive their payments, as to whether these will be in cash or other means.

And while SIAS acknowledged Utico as the only investor that includes an offer for the retail holders of Hyflux’s preference shares and perpetual securities (PnP), it added that negotiating with Utico has been a “long-drawn-out affair which has consumed substantial time and effort of all stakeholders for more than 1.5 years with no result to show,” noted The Business Times.

Utico is required to respond to SIAS by Friday (Jul 16). /TISG

Read also: Would-be white knight Utico makes a last-ditch attempt to prevent Hyflux liquidation

Would-be white knight Utico makes a last-ditch attempt to prevent Hyflux liquidation