Hyflux has agreed to a restructuring deal, with Utico FZC to pay S$300 million for new shares representing 95 percent of the troubled water company and provide an up to S$100 million working capital line, the Singapore-listed company said Tuesday.
Utico, which is a U.A.E.-based developer of water and power infrastructure in the Middle East, will subscribe for the new shares along with some co-investors, the filing said.
The other investors will be identified by Utico and are expected to be institutional and high net worth investors, and they are expected to take up to 7 percent of Hyflux’s enlarged share capital, Hyflux said.
If Utico uses a special purpose vehicle for its investment, Ivan Richard Menezes and Rashid Al Baloushi and/or United Ventures and Investments, an investment company wholly owned by the two, are expected to be among the investors, the filing said.
Around S$250 million of the proceeds of the deal will be put toward settlement of the unsecured financial debt, contingent debt and/or trade debt, the filing said.
Up to S$50 million of the working capital line will be used to fund payments to the holders of Hyflux’s debt securities as final settlement, the filing said.
The debt securities include the unsecured financial debt, the preference shares and perpetual capital securities, the contingent debt and liabilities and trade debts, the filing said.
The remaining balance of the proceeds of the share subscription and working capital line will be used to pay holders of subsidiaries’ trade debt, the working capital needs of the group, make payments to professional advisers and the business growth needs of the group, Hyflux said.
The deal is contingent upon Hyflux shareholder approval, government approvals and other conditions, the filing said.
If holders of Hyflux’s unsecured debt securities or unsecured financial debt representing at least 25 percent of the value of the debt oppose the debt moratorium or vote against the deal, Utico may terminate the deal, the filing said.