Hyflux has at least seven non-binding offers as cash runs out

 

[SINGAPORE] Hyflux, which was put under judicial management in November last year, currently has at least seven non-binding offers from potential investors, according to two people familiar with the matter.

 

While it fields those offers, the Singaporean water-treatment company' s cash is becoming depleted: it had S$18.4 million of cash as of Jan 31, enough to survive five months from that date, the people said, asking not to be identified because the matter is private.

 

The suitors have shown interest in Hyflux as a whole or for some of its assets, but the bids have varying degrees of complexity and many need additional clarification, the people said.

 

Patrick Bance, a Singapore-based director at Hyflux' s judicial manager Borrelli Walsh, declined to comment.

 

Once a corporate highflyer, Hyflux is Singapore' s most high-profile debt-restructuring case that has dragged on since a court-supervised process began in May 2018. Rapidly declining liquidity is adding to the woes: its cash and equivalents halved for two straight years through 2020.

 

Borrelli Walsh isn' t yet able to determine whether the company will be restructured in entirety or its assets will be sold piecemeal, according to the people.

 

The judicial manager seeks binding offers from suitors by March 31 and targets finalising the term sheets with shortlisted investors by April 15, the people said.

 

In January this year, Hyflux said 17 potential investors were conducting due diligence for submitting non-binding offers and the judicial manager would invite shortlisted suitors to participate in second stage of bidding process on or about Feb 15.

While it fields those offers, the Singaporean water-treatment company&rsquo s cash is becoming depleted: it had S$18.4 million ($13.8 million) of cash as of Jan. 31, enough to survive five months from that date, the people said, asking not to be identified because the matter is private.

 

 

HYFLUX' S judicial managers will hold a virtual townhall meeting on Jan 14 at 6pm Singapore time for holders of the embattled water treatment firm' s perpetual securities, preference shares and medium-term notes (MTN).

 

In a bourse filing on Tuesday, the judicial managers from Borrelli Walsh noted that those interested to join the meeting must register by Jan 11, 6pm at this site: https://septusasia.com/hyflux-vtm-registration. They will then receive an email by Jan 13, enabling access to the meeting.

 

In addition, holders of Hyflux' s perps and preference shares can email their queries to [email protected], while MTN holders who have queries they wish to be addressed during the townhall meeting can send these to [email protected]. The deadline to do so is Jan 8, 6pm.

 

According to the judicial managers, the timing and amount of any recovery for the holders are, at this stage, " uncertain" and influenced by several factors, including the outcome of the investor process which is underway, the terms of any proposed restructuring agreement, as well as the successful execution of any proposed restructuring agreement.

 

They added that an update of the investor search and restructuring process will be provided during the meeting.

 

Fourteen potential investors are now undertaking enquiries in respect of an investment in Hyflux, the judicial managers said.

 

Going by the estimated timeline for the first stage of the investor search process, potential investors are to submit non-binding offers to the judicial managers by Jan 31. Shortlisted investors will then be issued a notice around Feb 14 inviting them to participate in the second stage of the investor-bidding process.

 

Last week, Bloomberg reported that Hyflux now has only about S$21.5 million in cash, with the amount enough to last at least 10 months, according to a person familiar with the matter.

 

The news also means that this is at least the second year in which liquidity at the water treatment company has more than halved, Bloomberg said.

 

[SINGAPORE] Singaporean company Hyflux, which was put under judicial management last month, now has only about S$21.5 million in cash, according to a person familiar with the matter.

 

The amount is enough to last at least 10 months, the person said, asking not to be identified because the matter is private.

 

The news means this is at least the second year in which liquidity at the water treatment company has more than halved.

 

It had S$44.6 million in cash and equivalents at the end of 2019, compared with about S$92 million on Dec 31, 2018, court affidavits from March this year and January 2019 show.

 

Hyflux is Singapore' s most high-profile debt-restructuring case, which has dragged on since a court-supervised process began in May 2018, frustrating creditors and some 34,000 retail investors.

 

The once corporate highflyer faces about S$2.8 billion of investor claims, more than S$1 billion of which are from holders of its perpetual capital securities and preference shares.

 

Judicial managers Borrelli Walsh said earlier this month that they were in talks with 14 new potential investors, without disclosing their identities. That' s on top of five existing suitors.

 

Half of the 14 new bidders for Hyflux are financial investors, including one in Singapore that manages more than US$100 billion in assets, according to the person.

 

Bids include three more suitors from Singapore: another financial investor with assets over US$20 billion and two non-financial companies with latest annual revenues of more than US$800 million and US$200 million each.

 

A company from Japan with annual revenue of over US$40 billion and another non-financial firm with operations in Singapore and Japan and yearly revenue of more than $30 billion are also in the race, the person said.

 

Borrelli Walsh director Patrick Bance declined to comment.

 

THE judicial managers of Hyflux and its unit Hydrochem are in talks with 14 new potential investors, and aim to identify a suitable investor by the end of January next year.

 

However, the judicial managers from Borrelli Walsh said on Tuesday that they are unable to disclose the identities of these investors, as many of the investors had only recently contacted them.

 

The judicial managers added that they had contacted five investors who had previously expressed an interest in Hyflux and Hydrochem, and continue to work with some of those investors.

 

Hyflux and Hydrochem were placed under judicial management (JM) by the Singapore High Court on Nov 16, capping a two-year-long failed attempt to restructure the business.

 

The JM application had been filed by an unsecured working group of 19 banks which are owed S$931 million by Hyflux. The water treatment player also owes S$900 million to some 34,000 retail investors holding its perpetual and preference shares.

 

On Nov 24, the judicial managers issued a notice inviting expressions of interest from parties keen to invest in the embattled water treatment player as part of a restructuring process.

 

HYFLUX' S judicial managers will " shortly arrange" a virtual meeting or telephone call with holders of the embattled water treatment firm' s perpetual securities, preference shares and medium-term notes.

 

Borelli Walsh' s Patrick Bance, who was appointed as Hyflux' s judicial manager alongside Hamish Christie from the same firm, told perpetual and preference share (PnP) holders and noteholders in a letter last Friday that the judicial managers are undertaking an urgent review of the financial and operational affairs of Hyflux and Hydrochem (S) Ltd, and their subsidiaries.

 

The powers of the companies' directors have been suspended since Nov 16, he said.

 

Information about the upcoming meeting or call will be made available to the PnP holders and noteholders " as soon as possible" , Mr Bance added.

THE judicial managers of Hyflux and its unit Hydrochem (S) Pte Ltd are inviting expressions of interest (EOI) from parties keen to invest in the embattled water treatment player, as part of a restructuring process.

 

Interested parties will need to reach out by Dec 4 to Hyflux' s judicial managers from Borrelli Walsh, Hamish Alexander Christie and Patrick Bance, according to a notice published on The Business Times on Tuesday.

 

Hyflux and Hydrochem were placed under judicial management by the Singapore high court on Nov 16, capping a two-year-long failed attempt to restructure the business.

 

In placing the firm under judicial management (JM), Justice Aedit Abdullah said that its debt moratorium - which provided interim protection from creditors - had been in place for a " very long time" , and " must come to an end at some point" .

 

The JM application had been filed by an unsecured working group of 19 banks, which are owed S$931 million by Hyflux. The water treatment player also owes S$900 million to some 34,000 retail investors holding its perpetual and preference shares (PnPs).

 

Founded in 1989, Hyflux listed on the Singapore Exchange in 2001. Its business had primarily comprised project investments - where it developed and operated water treatment facilities and waste-to-energy projects, as well as engineering procurement and construction.

 

The company also provided operations and maintenance services for water treatment plants.

 

It operated in Asia, the Middle East and Africa.

 

Hyflux' s judicial managers will provide an information memorandum to interested investors after executing a confidentiality agreement.