SINGAPORE: Embattled water treatment firm Hyflux will hold scheme meetings next month for different classes of creditors to vote on its restructuring plan, it announced in a bourse filing on Wednesday (Mar 18).
The first scheme meeting on Apr 22 will start at noon for banks, medium-term noteholders, trade creditors and contingent creditors, while the second session will be held at 7pm for the large group of retail investors who own perpetual securities and preference shares.
Trade creditors and inter-company creditors of Hyflux’s three subsidiaries will have their scheme meetings the next day, according to the filing issued just after midnight.
The sessions for creditors of Hyflux Membrane Manufacturing and Hydrochem will begin at 10am on Apr 23, while Hyflux Engineering’s creditor scheme meeting is scheduled at 2pm.
All scheme meetings will be held at Hyflux’s office at 80 Bendemeer Road.
These details were announced a week after the troubled water treatment firm secured the go-ahead from the Singapore High Court to convene its scheme meetings.
However, Hyflux said it is “still considering the best approach” to hold these meetings given an evolving COVID-19 outbreak and the latest measures announced by the Government such as restrictions on large-scale events.
“In the event of any further developments, the company will update creditors via SGXNet or such other means as may be appropriate as soon as practicable,” it said.
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Hyflux, which remains under court protection until Apr 30, is in the final legs of concluding a S$400 million restructuring deal with United Arab Emirates utility firm Utico.
The rescue plan, signed last November, will need to get the okay from a majority of creditors – at least 50 per cent in number and 75 per cent in value of each creditor class present at the scheme meetings – and another court approval by May 26 before it expires.
The Securities Investors Association (Singapore), or SIAS, has said it is preparing to hold its own town hall sessions from Mar 23 onwards to help retail investors better understand the deal.
Details of these sessions will be announced “shortly”, SIAS president David Gerald said in a statement last week.
Under the proposed deal, this large group of retail investors have been given two options.
The first option is to receive an upfront cash payment of up to 50 per cent of one’s investments, capped at S$1,500.
The second option also offers the same cash amount, but this will be paid out over two years with a yearly interest of 1.25 per cent. This option also comes with an extra cash payout that will be made on a “pro rata” basis.
If shares of Utico or an affiliate are listed within two years of completing Hyflux’s restructuring, this extra cash payout will either be S$50 million or the cash equivalent of 4 per cent of the issued share capital at the listing price, whichever is higher. If such a listing does not occur within two years, it will be S$50 million.
However, this extra payout will be reduced based on the percentage of retail investors who choose the first option. Also, it will only be paid in five equal instalments in the third and fourth years after the restructuring becomes effective, SIAS said in its statement.
This has been described by analysts as an “uneven” deal that favours those with smaller investments. Some retail investors have also expressed their disappointment, telling CNA that it is “nothing … to cheer” and that they are considering voting against the restructuring plan.
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An unsecured working group made up of seven banks have also previously said it would not be supporting the scheme, citing no confidence that Hyflux and Utico would be able to resolve their issues, such as how fees should be paid to the various parties’ lawyers and consultants.
Adding more uncertainty to Hyflux’s restructuring is the entry of little-known investors after the rescue pact with Utico was signed.
The first is a little-known investor called Aqua Munda which came up with an offer in December to purchase about S$1.8 billion worth of Hyflux’s debts.
The second is a Singapore-based company called Longview International Holdings which expressed interest last month in investing in Hyflux together with a joint venture partner from China.