Hyflux: Oyster Bay Fund weighing investment of up to S$500 million

Singapore five-dollar note Photo by Leslie Shaffer

Hyflux said Friday it received a non-binding letter of intent from Oyster Bay Fund which has proposed an investment of up to S$500 million in the troubled water infrastructure company.

“As an indication of the investor’s good faith and intent, but subject to regulatory clearance and the execution of a definitive agreement, the investor is prepared to purchase preference and ordinary shares in HyfluxShop Holdings Ltd. from the company for up to S$26 million.” Hyflux said in a filing to SGX.

Those funds were intended to be used as working capital, Hyflux said.

Oyster Bay Fund, a global multi-strategy investment fund seeking long-term capital appreciation, has indicated it is “keen” to reach a binding agreement as soon as possible, Hyflux said.

This letter of intent followed Hyflux revealing earlier this month that UAE-based Utico FZC, the Middle East’s largest full-service utility and developer, is the investor which provided a non-binding letter of intent for a possible S$400 million injection and possible urgent interim funding.

On Friday, Hyflux said it was continuing to engage with other parties, giving priority to those willing and able to provide interim funding and reach a binding deal in the shortest possible time.

Hyflux had walked away from a white knight investor in early April.

SM Investments, a consortium of the Salim Group and the Medco Group, had entered a binding agreement in October to invest S$530 million for a 60 percent stake in Hyflux, which had filed for court protection in May. Hyflux had said the oversupply of gas in Singapore’s market had resulted in depressed electricity prices, hitting earnings in 2017 and driving losses in the first quarter of 2018.

But in early April, Hyflux terminated the deal, saying it had “no confidence” that SM Investments would complete the investment after the Indonesian consortium failed to provide a written commitment it would do so.

 

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