Hyflux receives letter of intent for potential investment from unnamed China-based suitor
15 June, 2019
Another potential suitor has knocked on the doors of embattled water treatment firm Hyflux with a non-binding letter of intent for a possible investment.
The China-based investor, whose name was not revealed in the exchange filing on Saturday (Jun 15), was described as a subsidiary of a state-owned enterprise in the industrial field which works on a global scale to provide comprehensive power services.
The investor’s holding company also has expertise in wind and solar energy solutions, nuclear industry, medical technology and agriculture, the filing added.
Hyflux said the potential investor previously executed a non-disclosure agreement and has started preliminary due diligence on the group.
The investor has also “reserved its right to terminate discussions” if a judicial manager or liquidator is appointed over Hyflux or its subsidiaries.
The proposed deal is subject to regulatory clearance, due diligence and the execution of a binding agreement on mutually agreed terms, the filing added, without specifying details such as investment amount.
Hyflux, whose year-long restructuring journey remains closely watched by tens of thousands of retail investors, said it continues to engage all potential investors and will make appropriate announcements as and when there are further material developments.
The debt-laden firm told the court last month that it is in talks with seven parties since it fell out with former white knight SM Investments in April. It was unclear if the investor revealed on Saturday is one of them.
The seven included United Arab Emirates utility firm Utico, which is in “advanced” discussions over the terms of a binding term sheet for a S$400 million investment. The UAE utility firm has given Hyflux a deadline of Jun 17 for a binding agreement to be signed.
Advanced negotiations are also under way with global multi-strategy investment fund Oyster Bay Fund over a possible investment of up to S$500 million, according to a May 27 affidavit by Hyflux chief Olivia Lum.
The same affidavit also revealed that Hyflux is in touch with five other unnamed investors. One of them is a large desalination firm, which issued a non-binding letter of interest to acquire certain Hyflux assets in Algeria, Oman, the Middle East and the North Africa region.
The others include a large player in Asia’s power sector that is mulling a possible merger with Hyflux, a foreign investment fund which invests in distressed companies, an Asia-based nuclear and civil engineering contractor and a waste treatment firm.
Ms Lum, in that affidavit, said the company has “prioritised discussions with potential strategic investors” looking to invest in the entire Hyflux group, compared to those interested in specific parts of the business.
Hyflux will “select one investor” to enter into a binding agreement by mid-June, according to its legal advisors in court last month.
Its court-approved debt moratorium will end on Aug 2.
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