Hyflux and Utico clash over restructuring deal

The water firm expressed that their revised offer may need more time.

Hyflux and Utico are in disagreement whether or not the restructuring agreement (RA) is still intact, according to SGX filings. For the embattled water firm, the RA dated 26 November 2019 “has ipso facto ceased and determined.”

“However, in your letter of 26 May 2020, you had proposed ‘to proceed with the RA terms and conditions as signed as of (sic) 26 November 2019’ except for four points set out therein which appears to propose revisions to certain key terms (Revised Offer). Your Mr. Richard Menezes sent a further email on 10 June 2020 (the “Utico 10 June 2020 Email”) which appears to add terms to the Revised Offer,” director Lau Wing Tat wrote in a letter to Utico’s Richard Menezes.

Menezes then replied to Hyflux, confirming that the RA was indeed extended. “All recoveries to creditors per RA of Nov. 26th 2020 stand intact. Hyflux valuation hence per RA, 26th May 2020 stands intact,” he wrote.

Hyflux also asked for a clarification on the RA extension, whether Utico is saying that its revised offer is open for acceptance until 30 June, or that the long-stop date as defined under the RA is to be extended to 30 June and that the revised offer continues to be open for acceptance at any time before that.

“If Utico is proposing the latter, as you are undoubtedly aware, under the current COVID-19 regulations in Singapore, it is still legally and physically impossible for us to conduct physical scheme meetings which are necessary to approve Utico's revised offer, and any extension will need to be longer than to 30 June,” Lau said.

In response, Menezes stated that the extension to 30 June can be considered after the Hyflux board’s acceptance and once creditors state “that they are ‘open’ for engagement to consider this proposition."

“[Hyflux] is considering the content of the Utico 16 June 2020 email and will be obtaining input from stakeholders on the same,” the water firm assured in another SGX filing.