Hyflux's Utico deal plagued by woes from P&P holders

Some P&P holders intend to vote against the deal as concerns on financial obligations arise, said SIAS.

Securities Investors Association (Singapore) (SIAS) has issued a query to Hyflux Board in which its preference shares and perpetual securities (P&P) holders expressed dissatisfaction towards the current proposal with Utico , according to a letter from SIAS president David Gerald.

The letter added that P&P holders are having intentions to vote against it, as it should be a scheme proposed on the current terms.

Gerald also asked for certain clarifications about the payment options presented in an earlier SGX filing. “There is deep concern about Utico’s ability to meet their financial obligations under the proposed scheme. This is especially so for P&P holders who may choose Option 2, as they feel that they may not be paid anything at all when the time comes for payment,” he wrote.

SIAS also expressed concerns on the “very little” financial information on Utico FZC (a non-Singapore based party) and Utico Singapore. They also encouraged Hyflux’s board to abstain from voting on the Utico deal to avoid any conflicts of interest.

“Without a full understanding of this fee, I am sure many P&P will not be very happy and could vote against the deal and prepared to write off,” Gerald said.

SIAS also raised the issue of advisors fees. Gerald demanded that the advisors Drew & Napier LLC and PriceWaterHouseCoopers Advisory Services should be reimbursed and should be given “special treatment” as they are said to have spent a significant amount of time addressing their various concerns.

“SIAS has been given to understand by Hyflux’s lawyers that they had informed the Court that a sum of $1.5m had been set aside for the SIAS Advisors. However, by an email dated 31 December 2019 from Hyflux’s lawyers to the P&P Advisors, were informed that “the Company had instructed nTan to set off the $1.5m against the fees owing to nTan shortly after the Company’s advisors and the SIAS advisors were paid in October 2019,” Gerald explained.

Lastly, SIAS is also seeking clarifications on the proposed Aqua Munda deal, asking the latter to cooperate with Hyflux’s P&P holders.