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UAE's Utico agrees to extend Hyflux restructuring deadline

Utico improves RA offer & keeps recovery to senior creditors intact, P&P to benefit further, Oman, Algeria shareholders to get relief

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Utico, Hyflux

UAE based water utilities company, Utico, has agreed to extend the deadline to its Nov. 26th 2019 RA (Restructuring Agreement) with Hyflux, which expired on 26th May, to June 30th 2020.

The extension till 30th June 2020 with additional terms gives the senior creditors same recovery, improves the P&P recovery, and gives relief to the shareholders and lenders of Oman and Algeria IWP SPVs.  

Hyflux sent a letter requesting the extension on 4th June 2020, which was agreed to on 10th June.  Utico has agreed with a primary requirement not to extend the moratorium beyond 30th July 2020, which is the current moratorium granted by the court, or make it shorter. 

Utico has also asked the Hyflux board to step down immediately on scheme approval.

This action by Utico has also given certainty to the deal with shares and cash option.   Along with asset rectification and remedy, Utico stated that this will build true all round value for all parties at Hyflux, creditors, P&P, asset shareholders and lenders.

In another development, Utico stated that 2 interested parties had approached it to partner for acquisition of Hyflux and grow Utico. This could enhance Utico’s premier market position even further.

The Utico spokesman also said that the senior management is studying the propositions from the parties who have interests in GCC, UK, Singapore and Indonesia.  These propositions are for a deal to acquire shares at Utico Fzc which could value the company up to US$ 1.5b.

The spokesperson said that right now Utico is comfortable to close this transaction on its own but will study the propositions as creditors, Hyflux, Singapore court and SGX move to close the scheme and get the stock traded. Currently only the Utico RA scheme is in the Singapore court, and the court has noted that the scheme recovery percentage to creditors and P&P has not changed from the Nov. 26th 2019 RA which is the Highest on offer.

Utico recently also announced that it is seeking a US$500m sukuk and targets to close it later this year.

Stakeholders of Oman and Algeria assets are also currently actively discussing several options with Utico which could culminate in a deal soon, the spokesman added.

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