Hyflux to reallocate advisor fees after WongPartnership exit

It initially planned to satisfy at least 75% of SIAS’ advisor fees.

Embattled water firm Hyflux expressed a need to undertake a reallocation exercise after the discharge of its former legal advisor, WongPartnership, according to a letter in response to queries from the Securities Investors Association Singapore (SIAS).

Further, the company will engage its new legal advisors to take over the conduct of matters previously handled by WongPartnership at short notice.

The company initially planned for a pro rata distribution that would satisfy at least 75% of the professional advisors’ fees. The firm plans for the SIAS advisors to be paid by proportion out of the sums that Utico is providing based on the restructuring agreement.

Hyflux projected that if Utico pushes with raising the advisor pot from $40m to $50m, all verified outstanding professional advisors’ fees would be paid “to a significant degree.”

The company further clarified to SIAS that there was no trust to which a sum of $1.5m was held for the SIAS advisors, as was said by Hyflux’s former legal advisor during the stakeholders’ meeting in December 2019.

“...and we had raised questions with the Company’s former legal advisors about their representations to the Court,” Hyflux said.

The firms said that SIAS’ advisors have been paid some $2.4m to date.

Additionally, its board asserted that the advisory fees paid to nTan Corporate Advisory were “fully justified,” noting that it advised the firm to stave off the unsecured working group’s (UWG) push to place it into judicial management (JM), secure an investor and restructure.

Hyflux said that if it is put in JM, the P&P holders would most likely receive no returns as the proceeds from the sale of the company’s assets would not be enough to repay the senior unsecured creditors in full.

“ nTan has also provided invaluable advice to the Board in navigating the difficult restructuring process and dealing with the myriad of complex conflicting issues and challenges faced by the Company and the Board,” it said.

The firm also said that the terms offered to the P&P holders was ultimately decided by white knight Utico. It noted the holders’ concerns on Utico’s ability to meet their financial obligations under the proposed scheme.

“We believe that these questions should be addressed by Utico. To that end, we have instructed our legal advisors to reach out to Utico’s legal advisors, White & Case, to obtain further financial information on the Utico entities,” it added.