Hyflux: Potential investor interested in acquiring Algeria and Oman assets

Singapore two-dollar bills

Hyflux has received a non-binding letter of interest from a potential investor interested in acquiring certain assets in Algeria and Oman and other assets in the Middle East and North Africa, the troubled Singapore water and energy player said Wednesday.

The potential investor’s interest also includes the operation and maintenance activities for the assets, Hyflux said in a filing to SGX Wednesday.

Hyflux said the potential investor is among the top-10 largest desalination companies globally, and it is a subsidiary of one of a leading infrastructure company which is “highly ranked” for transportation and greenfield infrastructure expertise. It added the infrastructure company has a presence and workforce on five continents.

“The investor is a specialist in engineering, construction, operation and maintenance of water treatment facilities, in particular water desalination plants, with a focus on build-own-operate-transfer, management of concessions and related services,” Hyflux said. “The investor intends the proposed transaction to grow its portfolio of desalination plants.”

Hyflux said the investor was “conscious of the timeline” and indicated it would be willing to devote “all necessary resources” to complete a transaction in the shortest possible timeframe.

The Singapore company has been scrambling to find an investor after it terminated a deal with a white-knight investor in April; Hyflux, had filed for court protection in May, saying an oversupply of gas in Singapore’s market had resulted in depressed electricity prices, which hit earnings in 2017 and drove losses in the first quarter of 2018.

In addition to the desalination investor, Hyflux has received a binding offer from UAE-based Utico and a non-binding letter of intent from Oyster Bay Fund proposing an investment of up to S$500 million.

Hyflux indicated the desalination investor may be a less desirable option.

“While the company will consider all serious offers and expressions of interest received, the priority remains for a strategic investor for the entire group,” Hyflux said. “The company is continuing its engagement with all potential investors.”

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.

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.

The deal’s termination led to PUB rescinding its extension of the default cure period for the contractual obligations of Hyflux’s Tuaspring Desalination Plant. PUB issued a notice to Hyflux that it would terminate its water purchase agreement (WPA) and take over the plant.

 

 

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