Hyflux in Talks With Middle East’s Utico for S$400 Million Funds

A man carrying an umbrella walks along the Jubilee Bridge in front of the city skyline in Singapore, on Wednesday, July 12, 2017. Singapore is scheduled to release second-quarter gross domestic product data on July 14. Photographer: Nicky Loh/Bloomberg

(Bloomberg) — Singapore’s Hyflux Ltd., the water and power company battling for survival, said it is in talks with Middle Eastern utility Utico FZC about securing S$400 million ($294 million) of funds, disclosing the identity of the potential investor after receiving a non-binding letter of intent.

Hyflux’s legal and financial advisers are in discussions with Utico on the details of the investment, with a view to set them out in a binding term sheet, it said in a filing to the Singapore exchange late Friday. Utico informed Hyflux it plans to keep the company’s main businesses so they remain operational, and to retain current management, according to the statement.

Hyflux said April 25 it had received a non-binding letter of intent from an undisclosed Middle East developer. The possible injection of S$400 million will be used for equity and working capital purposes and “possible urgent interim funding,” it said.

Hyflux’s attempt at restructuring S$2.8 billion of unsecured claims, one of the largest such cases in Singapore in recent years, was thrown into disarray on April 4 when it scrapped a pact with its would-be savior SM Investments. The company canceled a vote by junior creditors scheduled for the next day on the S$530 million rescue plan involving the Indonesian group.

Judicial Management

The fallout turned bitter with Hyflux suing to claim a S$38.9 million deposit in an escrow account from SM Investments. A group of unsecured lenders including Mizuho Bank Ltd. and Bangkok Bank Pcl filed a court application to vary the debt moratorium in order to put Hyflux and its unit Hydrochem (S) Pte under judicial management.

“Utico has informed the company that it is aware of the urgency of the restructuring,” Hyflux said Friday, adding it is also in discussions with other potential investors.

Utico, based in the United Arab Emirates, is the largest private full-service utility and developer in the Middle East, according to Hyflux. Its shareholders and investors include the governments of Oman, Saudi Arabia, Bahrain and Brunei.

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