Singapore based water and power company, Hyflux, has said that it is in talks with the UAE’s Utico for a potential $294mn funding.
The company, which is battling for survival, said last week it had received a non-binding letter of intent from a Middle Eastern water and power utilities developer-owner with a “reputable track record”.
The funds, it had said, would be used for equity and working capital purposes, as well as possible urgent interim funding.
In a bourse filing, Hyflux’s legal and financial advisers stated that they are in discussions with Utico on the details of the investment, with a view to set them out in a binding term sheet.
Hyflux described Utico as the largest private full-service utility and developer in the Middle East that counts sovereign institutions from Oman, Saudi Arabia, Bahrain and Brunei as its shareholders and investors.
Hyflux said the investor “is aware of the urgency of the restructuring” and intends to invest “on a win-win basis”.
Utico plans to keep Hyflux’s key entities “intact and operational”, retain the group’s current management and reach “an amicable deal” with creditors and investors, according to the announcement.
Hyflux said its legal and financial advisors are “currently engaged in active discussions” with Utico to work out a binding term sheet for the potential investment.
Meanwhile, it remains in “concurrent discussions with several other parties” that are interested in investing its business, the company added.
This marks the latest development in Hyflux’s high-profile debt restructuring, which started last May and has since been marked by unexpected twists and turns, such as the termination of a key rescue deal last month.
Hyflux’s attempt at restructuring $2bn of unsecured claims, one of the largest such cases in Singapore in recent years, was thrown into disarray on 4 April when it scrapped a pact with its would-be saviour SM Investments.
The company cancelled a vote by junior creditors scheduled for the next day on the $391mn rescue plan involving the Indonesian group.
The fallout turned bitter with Hyflux suing to claim an $28.7mn deposit in an escrow account from SM Investments. A group of unsecured lenders including Mizuho Bank and Bangkok Bank filed a court application to vary the debt moratorium in order to put Hyflux and its unit Hydrochem under judicial management.
Hyflux said that Utico has informed the company that it is aware of the urgency of the restructuring, adding it is also in discussions with other potential investors.