HONG KONG: Distressed Singapore water and power company Hyflux Ltd. is “progressing towards a deal” with United Arab Emirates-based utility Utico FZC.
The proposal involves Utico investing in an 88% stake in Hyflux for S$300 million ($221 million) as equity and S$100 million as a shareholder loan, according to a joint announcement from the companies.
This is subject to discussions being completed with relevant stakeholders.
Utico has also informed Hyflux of its intention to offer the cash equivalent of a 4% stake in the enlarged Utico group and additional cash to the holders of preference shares and perpetual securities.
Hyflux is seeking to fix billions in liabilities after an expansion into the power-supply business that went awry.
It has been looking for a white knight investor after a deal with Indonesian consortium SM Investments fell through in April.
Its catastrophic slump has stunned 34,000 individual investors, and prompted a rare public protest in the country.
The water treatment firm is being closely watched given Singapore’s ambitions to become a hub for the restructuring of troubled companies in Asia.
Utico had given Hyflux a June 27 deadline for entering a binding agreement.
Hyflux said on June 28 that it continued to work toward a binding agreement with one of its potential investors, without specifying which one.
In May, a Singapore court extended a so-called debt moratorium that prevents creditors from taking action until Aug. 2. - Bloomberg