Utico has stated that it supports any extension of debt moratorium that the court will grant Hyflux provided it was not prejudiced towards its creditors or PNP.
This since Utico had signed the agreement on August 26th 2019, the date of the deadline, but Hyflux did not sign, Utico said in its statement.
“We remain committed to Hyflux along with the creditors and PNP as an ethical White Knight investor,” said Mr. Richard Menezes, CEO of Utico.
However, this situation also required that the Board of Hyflux and its advisors confirm that there will be no value leakage during this period. The same issues of Advisors Fees, Board representation and management oversight which are all related remained as the key gap items even today, Utico said.
Mr. Menezes said that Utico had also written to Securities Investors Association, Singapore (SIAS) officially offering its interest to file an affidavit with their support and also offered further testimony of its negotiations with Hyflux from its offer and entry in mid-April 2019 if the court so required.
He said that the previous SIM deal and its after effects were felt for some time even after Utico made its entry which required adjustments but it did not impact the PNP offer. Utico received majority approval from the representative PNP attendees for the Town hall conducted at Sheraton Singapore on 1st August 2019. The approval poll of that was over 77%.
Mr. Menezes also said that the Restructuring Agreement signed by Utico on 26th August and which had the support of creditors and SIAS, included clauses that obligates Hyflux to inform Utico of any investor offers, higher or lower, and give Utico the right of opportunity to match , which implies “right of refusal,” for the higher or lower offers. Hyflux board is also obligated by fiduciary duty and responsibility to accept the highest offer without prejudice to creditors and PNP, he said.
He said Utico was committed to the same as per the 26th August agreement which was signed by Utico but Hyflux did not sign, and required Hyflux board approval.
The key criteria for this new extension period will be how Hyflux will stop “value leakage” during this new extension of moratorium period, if the court does grant and also at the same time not be prejudiced towards creditors, particularly PNP. This especially since Hyflux Board of Directors and its advisors refuse to guarantee or confirm stopping leaking of value.
Mr. Menezes reminded again that this situation was not caused by Utico and that the current situation did not get better with any further passage of time.