Date: December 30, 2019
We refer to Hyflux’s announcement on the SGX-ST dated 27 December 2019, disclosing Aqua Munda’s invitation memorandum dated 27 December 2019 (“Invitation Memorandum”).
Aqua Munda has proposed to medium term noteholders and senior unsecured creditors of Hyflux to tender their holdings at a minimum of 85% discount. This offer is not open to Hyflux Perpetual Securities and Preference Shares holders (P&Ps). Some P&Ps have indicated to SIAS that they would also like to participate in a similar exercise. Aqua Munda has announced that they would engage SIAS after the close of the current invitation. Aqua Munda has indicated their commitment to a debt restructuring exercise that is fair and equitable for all stakeholders. SIAS will update all P&Ps on any discussion or proposal received from Aqua Munda.
At the moment, most of the queries raised by creditors relate to the identity of Aqua Munda and its director and sole shareholder, and whether Aqua Munda has the necessary funds to complete their proposed reverse Dutch auction. SIAS calls on Aqua Munda, in the interest of transparency, to disclose its funding and the entities related to Aqua Munda and its intention with respect to restructuring process as soon as possible.
Based on the terms of the Invitation Memorandum, noteholders are to be aware that the invitation is solely between Aqua Munda and the senior unsecured creditors and does not involve Hyflux. Accordingly, SIAS is advised that Hyflux has no obligation to conduct any due diligence on Aqua Munda and is purely facilitating the dissemination of information from Aqua Munda to Hyflux’s creditors.
The invitation is for a minimum 85% discount to be tendered (which is similar to Utico’s offer which is paid in two installments). Only one submission per noteholder is allowed and once submitted tenders cannot be amended or retracted. Aqua Munda has the sole discretion as to which bids are accepted and not obliged to give any reasons for acceptance or rejection.
All accepted bids must vote in accordance with the instructions of Aqua Munda with respect to commencement, continuation, instruction, direction or authorization of any legal actions; support or reject any scheme application or extension; approve or reject any application for interim judicial management. The accepted bids will have to provide proxy to Aqua Munda for all voting. Results of acceptance or rejection are to be known within 45 days of the expiration of the deadline, and no later than 60 days.
Noteholders should ensure that they have read and understood the full terms and conditions in the Invitation Memorandum and have all the necessary information from Aqua Munda before making an offer to Aqua Munda for their debt as they will be unable to withdraw their offer once tendered. SIAS also understands that Aqua Munda may withdraw the invitation if the required level of support from creditors and noteholders are not attained.
Founder, President & CEO
Securities Investors Association (Singapore)