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Rift Between Hyflux, Suitor Remains With Offer Deadline Looming

Rift Between Hyflux, Suitor Remains With Offer Deadline Looming

(Bloomberg) --

A rift between Hyflux Ltd. and its suitor over the terms of the offer isn’t showing signs of healing, putting at risk the only chance now at resolving Singapore’s most high-profile restructuring case.

The offer by Utico FZC for the embattled water-treatment company is nearing a final test of investor vote and court approval, and the Middle Eastern bidder expects that to come late June or in the first week of July. It’s the only proposal for Hyflux with a concrete timeline, even as the court-supervised process has dragged on for more than two years.

Utico on Friday extended its deadline for a revised offer -- paying all Hyflux investors in stock now instead of cash -- to June 30 from June 4, saying it will give certainty to the deal. These comments “are Utico’s own” and don’t represent Hyflux’s views, the Singapore company said in a filing later that day.

The spat underscores a rocky relationship between the two managements despite Utico’s proposal being the only one currently to have reached final stages. While the bidder has frequently expressed displeasure on the deal getting delayed, even blaming the target’s board, Hyflux rebutted several claims from Utico, including ones on liabilities and adviser fees.

Rift Between Hyflux, Suitor Remains With Offer Deadline Looming

Utico expects the revised offer, which also seeks the immediate resignation of Hyflux’s board if approved, to be passed by investors.

“We are more confident now that the proposal, the only one in court, will be approved by all the stakeholders,” Richard Menezes, Utico’s managing director, said in a text message. “We don’t see any reason for the court to reject the proposal once the investors approve it.”

Hyflux declined to comment on anything more than their exchange filing on June 12.

Utico’s initial deal in November last year to invest a total of S$400 million ($287 million) is the only one with a definite timeframe. Spain’s FCC Aqualia SA and Longview International Holdings Pte separately announced their interest in investing in the Singaporean company earlier this year, while little-known Aqua Munda Pte in December offered to purchase debt of Hyflux noteholders and unsecured creditors.

The prolonged process has compounded frustrations for about 34,000 retail investors in Hyflux. Adding to the complexity, Singapore authorities said earlier this month they started an investigation into Hyflux and its current and former directors for suspected false and misleading statements. Hyflux said it would assist and cooperate with the investigations in a separate filing on June 4.

Hyflux’s board “has lacked foresight and empathy for all its investors throughout the restructuring process,” Utico’s Menezes said in the interview.

©2020 Bloomberg L.P.