Photo of TuasSpring power plant from Hyflux's website

Utico’s “part cash redemption offer” to Hyflux’s retail shareholders merely “exploratory in nature”

Emirati utilities group Utico’s “part cash redemption” offer to beleaguered water treatment firm and genco Hyflux’s retail perpetual and preference shareholders (PNP) is merely “exploratory in nature”, said the homegrown company in a meeting on Tue (28 May).

The Business Times reported that the offer, according to Hyflux, is still “currently being contemplated” by the utilities group.

Noting that it is continuing its discussions with several potential white knight investors including Utico, Hyflux insisted that the meeting “entailed no conclusive numbers or percentages, or indeed any binding agreement, whether in respect of the PNPs or any other stakeholder groups”.

The meeting was attended by Utico’s representatives and adviser, the PNPs’ adviser, and the Securities Investors Association (Singapore).

Hyflux encouraged its investors to refer to the information provided by the company in its disclosures to SGXNet, adding that it will make “appropriate announcements as and when there are any further material developments”, as reported by BT.

Utico chief executive Richard Menezes said last Sun that the utilities group offered Hyflux offered “part cash redemption and also a hope for full redemption with a plan and exit option” in a recent 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,” BT quoted him as saying.

Utico’s bid to delay PUB takeover of Tuaspring desalination plant rejected previously 

Utico’s request to delay Singapore’s national water agency Public Utilities Board (PUB)’s takeover of Hyflux’s Tuaspring desalination plant, which was due on 18 May, was rejected previously.

PUB told The Straits Times that it will stand by “all the announcements that have already been made about PUB taking over the Tuaspring Desalination Plant”.

“The Water Purchase Agreement will be terminated on May 17, and PUB will take over the plant on May 18.”

Menezes said in a press release on 16 May that the a delay in PUB’s takeover of the plant “will allow for Utico and Hyflux to enter into a transaction that would provide for remedial and rectification action of the plant to PUB’s satisfaction and goodwill”.

“This will build confidence and the reputation of Hyflux, which is a company that these investors believed in,” he added.

“We are prepared to work with Hyflux to ensure it performs without compromising any security aspects and ensure that this asset provides a return as well, with PUB support,” said Mr Menezes.

Additionally, he stated that Utico has plans to hold discussions with Hyflux’s retail perpetual and preference shareholders, who stand to lose a total of S$900 million worth of investments into the water treatment firm, and are now seeking recourse over their unsuccessful investments.

Utico is one of Hyflux’s three known potential white knight investors at this time, as the firm has also received non-binding letters of intent from international multi-strategy investment fund Oyster Bay Fund and an unnamed global water desalination company.