SINGAPORE (THE BUSINESS TIMES) – The Securities Investors Association (Singapore), or Sias, has requested white knight suitor Utico to place a non-refundable deposit of $10 million in Utico’s solicitor’s account or an escrow account by 10am on July 21, 2021, to confirm its plans to restructure Hyflux.
In a letter dated July 15 to the Middle Eastern utility firm, Sias president and chief executive officer David Gerald said it would require concrete milestones and a credible restructuring proposal from Utico.
This is so Sias can canvass support to extend Hyflux’s judicial management order from the retail holders of its preference shares and perpetual securities (PnP), before the next hearing for the troubled water treatment firm on July 21, 2021.
Sias has requested that the utility company give an undertaking, by the same date, that the deposit will be released to Hyflux immediately upon a court grant to extend the judicial management.
Utico may place its own restrictions on the use of the deposit, such as permitting it to be used for Hyflux’s working capital requirements pending the completion of Utico’s restructuring proposal, or not allowing the deposit to be used to pay down fees of advisers or the judicial managers and their lawyers, Mr Gerald said.
Sias further requested that Utico give an undertaking, by July 31, to provide a term sheet for its proposed restructuring proposal, which should contain terms not less favourable than its offer to Hyflux in its draft affidavit in June 2021.
The term sheet should also contain details on when Hyflux’s creditors may receive payment under the restructuring proposal and whether such payment is in the form of cash or other consideration, Sias added.
Sias said that while it appreciates that Utico is the only remaining investor with an offer to the PnP Holders, it noted that the negotiations have 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”.
Sias also said it is prepared to put Utico in touch with some PnP holders who may be interested in selling some of their holdings to Utico, as the utility company may not be able to intervene in the judicial management of Hyflux as a potential investor.
Sias added it would require a response from Utico by July 16.
Hyflux’s winding-up hearing, initially set on Monday, was adjourned after Utico made a last-ditch attempt to intervene. High Court Justice Aedit Abdullah had granted permission to circulate among creditors Utico’s draft affidavit, which was said to refute what the judicial managers had asserted regarding the failure to proceed with certain negotiations for the restructuring.
