Utico CEO makes offer for Hyflux 2 days after winding-up application

 

JUST two days after Hyflux Group' s judicial managers filed an application to wind up the water treatment company, chief executive officer of Middle Eastern utility firm Utico Richard Menezes is making an attempt to offer the crisis-hit company a rescue deal.

 

Mr Menezes told The Business Times (BT) that he has reached out to Hyflux' s judicial managers with a deal, though he declined to share the exact details.

 

He said that he has written to the judicial mangers to " save the company and make it equitable" and that " liquidation should be the last option" .

 

Under the latest proposal, Mr Menezes said, Hyflux' s unsecured senior creditors will receive five cents on the dollar while retail investors in Hyflux' s preference shares and perpetual securities (PnP) will receive four cents.

 

Mr Menezes has agreed to place S$50 million of his personal shares in Utico in escrow to guarantee the deal. This will be followed by S$50 million in cash once an agreement has been signed.

 

In response to queries on the chances of a deal taking place given that Hyflux has already filed for liquidation, Mr Menezes said: " The judicial managers might not accept my offer as they announced investor talks failed."

 

Hyflux' s judicial manager Borrelli Walsh, declined to comment when reached by BT.

 

Hyflux' s restructuring process has dragged on for more than two years.

 

A court-supervised process, which began in May 2018, has been punctuated by multiple requests for last-minute adjournments to consider new suitors.

 

In October 2020, Justice Aedit Abdullah had agreed to one final adjournment before Borrelli Walsh was appointed interim judicial managers in November.

 

Remarking on the repeated requests for extensions to Hyflux' s debt moratorium without better progress shown in closing a restructuring deal, Justice Abdullah had said at the time: " Suspicion is building up considerably whether there is some sort of gamesmanship going on here."

 

Even following its appointment, Borrelli Walsh had extended its term on more than one occasion to consider the various options possible for Hyflux.

 

Borrelli Walsh had on Feb 16 received a 90-day extension of its term until May 15, and subsequently sought to extend its term by 60 more days to July 14 to determine whether a potential restructuring of the group is possible.

 

But in a bourse filing on Friday night, the judicial managers said a restructuring is not possible and that the remaining value of Hyflux is " best realised in a liquidation" .

 

They noted that judicial management is no longer needed, and that its objectives are no longer capable of achievement, following the conclusion of the investor process.

 

Utico had been among the earliest of Hyflux' s suitors, first offering a more than S$400 million rescue deal in 2019. There were later attempts to sweeten this deal, and Utico had also been among the parties Borrelli Walsh had been in talks with during the judicial management term.

 

Trading in Hyflux securities has been suspended since May 2018.