Utico offers Hyflux’s small investors ‘part cash redemption' as part of ‘win-win’ deal
SINGAPORE: United Arab Emirates utility company Utico on Sunday (May 26) said it is offering investors of Hyflux’s perpetual securities and preference shares a deal with “part cash redemption”, as it repeated its call for a “win-win” resolution.
This came after the company met with Hyflux’s financial and legal advisors, the Securities Investors Association Singapore (SIAS) and others last week.
In a media statement, chief executive Richard Menezes said Utico made the offer of a “part cash redemption and also a hope for full redemption with a plan and exit option” during the meeting.
“Full details can only be revealed later but as part of the overall deal, small investors of up to S$2,000 to S$3,000 could get 50 per cent cash redemption along with full redemption opportunity, while the rest of the investors could get a similar but staggered and cascade deal.”
“All investors will have an opportunity to get their money back … if they support the deal,” he added.
Mr Menezes also explained why the company is making this offer to Hyflux’s junior creditors with perpetual securities and preference shares, instead of senior creditors.
“(Senior creditors) took an active business risk with ringside view, whereas (perpetual securities and preference shares) investors took a passive blind faith risk,” he said in the statement.
He said neither coupon nor principal was guaranteed in the offer prospectus and while trading at SGX, and morally there remains some responsibility from Hyflux for the predicament of the perpetual securities and preference shareholders.
Meanwhile, Utico said it could consider a listing in Singapore and “put some skin into the game” if it gets investors’ support for the deal.
Utico is the potential white knight which has indicated its interest to invest S$400 million in embattled Hyflux last month.
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Earlier this month, it made a last-ditch effort to request for a delay in the takeover of Tuaspring desalination plant by national water agency PUB – but failed.
It also proposed to hold a town hall session for investors of perpetual securities and preference shares.
On the latter, Utico said it is working with SIAS on the planning of the town hall session.
This is, however, “predicated to Hyflux signing a binding agreement and subject to the court granting a moratorium to complete a desirable restructuring in time”, the UAE company said on Sunday.
Hyflux will have a hearing in the Singapore High Court on Wednesday – the day its extended debt moratorium is set to expire.