UAE's Utico announces deal on advisors fees for Hyflux
S$400mn restructuring moves closer to finalisation
Utico has announced that it resolved a key item of advisors fees for Hyflux Restructuring Agreement (RA) at the WETEX 2019 and IDA World Congress held in Dubai.
A spokesman for Utico stated that the company has reached an in-principle deal to cap all advisors fees at S$40m. Hyflux advisor Mr. Nicky Tan led the talks with Utico Board of Directors and he has accepted to discuss with all advisors to accept the deal, which includes himself. From Utico’s side, Mr. Rashid Al Balooshi, Chairman of the company closed this point.
A delegation from Hyflux led by Ms. Olivia Lum and advisors visited Dubai last week to discuss pending issues. Board representation was also discussed and a mutual agreement was reached for an acceptable position that could give the Board comfort considering the company’s current status and also to carry out their fiduciary duties.
A trust mechanism structure for moving PNP and consent following town halls was also discussed with agreement to take it forward. Utico expressed their commitment for the same.
Key item remaining was only management oversight held between consent and consult provisions, which Utico has said could be a possible deal breaker.
Utico stated that value leakage was linked to time, both inherent and market opportunities as well as quick decision making, which now remains to be seen especially since year end is near, impacting both Hyflux’s and Utico’s bottom lines if RA is signed later than sooner.
Utico said it is also concerned that the minority shareholders of Qurrayat project in Oman have reached an agreement to take over the plant with the off taker clearly expressing impartiality to this possibility. There are also other parties who are looking to poach Hyflux assets including Mitsubishi for TuasOne, Spanish companies Valoriza, Aqualia and Suez for Algeria project.
Utico stated that time is the greatest asset of the company for holding value for Hyflux. It said that this continuous loss of time has a great impact for value of time and time value, stating that it will lower its valuation of the company to S$200m to Senior UWG (Unsecured Working Group) and S$100m shareholder loan for Hyflux by early next week, if the RA is not signed by then. It also stated that the PNP offer will remain as is even after early next week, save for provisions that above delays and decision making could impact.