In a strong sign of bonafide intent, the UAE-based utilities major through the media offered a town hall meeting in the coming days to Hyflux perpetual bonds and preference shares investors (PNP).
PNP had invested a total of S$900m into Hyflux after Hyflux had issued an initial offering of S$500m.
These junior unsecured, unguaranteed securities will get nothing when Hyflux is not performing nor is Hyflux obligated legally to pay them in current conditions. This is compounded further if the company is either sold to funds, to investors seeking overseas assets or goes into judicial management.
Utico, which recently unveiled a S$400 million binding offer White Knight investment to Hyflux, said that this bonafide endeavour of inviting retail investors for a town hall meeting was intended for a resolution to support the Hyflux deal. This since time is also of the essence.
“We understand that the investors of Hyflux are the ones who will suffer the most as junior unsecured creditors and their position and support must be resolved first,” Mr. Richard Menezes CEO of Utico, said in a statement.
Further, he said that a white knight investor cannot be an investor that only wants Hyflux and its assets or its businesses. It is a must that a fair and quick resolution is found for investors in the preference shares and perpetual bonds. Utico wants to be such a White Knight investor, he said.
“We will discuss and put a solid proposal after we hear them out. It is a fact that these investors are unsecured and/or any redemption or coupon must be a win-win deal,” the Utico CEO said.
Mr. Menezes said that to support the PNP, Utico has also requested Public Utilities Board (PUB) of Singapore by informing Hyflux to grant a delay in the takeover of the Tuasspring desalination plant on May 18. This consensual settlement of the situation will build confidence and reputation.
“Furthermore, it will allow for Utico and Hyflux to enter into a transaction which would provide for remedial and rectification action of the plant to PUB’s satisfaction and goodwill. This will build confidence and reputation of Hyflux, which is a company that these investors believed in. This was an asset built with PNP money. We feel PNP money and assets must be secured first since the prospectus stated the use of the funds for it,” Mr. Menezes said.
He said that Tuaspring was a strategic asset of Hyflux and for Singapore too. “We are prepared to work with Hyflux to ensure it performs without compromising any security aspects and ensure that this asset provides a return as well with PUB support,” he said.
Details of the PNP meeting with any regulatory approvals/ permissions will be announced soon, Utico’s statement added.