Utico calls on PUB to delay Tuaspring takeover

The firm’s CEO said that this will help them enter a smooth transaction with the struggling water company.

Hyflux’s Middle Eastern white knight UAE-based utilities firm Utico has sent a request to the Public Utilities Board (PUB) to postpone the upcoming takeover of the Tuaspring desalination
plant on 18 May.

According to Utico’s CEO, Richard Menezes, the delay will allow both Hyflux and Utico to “enter into a transaction which would provide for remedial and rectification action of the plant to PUB’s satisfaction and goodwill.”

“We feel [perpetual bonds and preference shares investors] money and assets must be secured first since the prospectus stated the use of the funds for it,” Mr. Menezes said.

However, PUB said that their decision will not be changed.

"There is no change to PUB’s position. The Water Purchase Agreement will be terminated on 17 May 2019 and PUB will take over the Tuaspring Desalination Plant on 18 May 2019," a PUB spokesperson said.

The PUB earlier terminated a Water Purchase Agreement (WPA) entered into by the agency with Tuaspring in 2011 after the latter failed to meet contractual obligations in the deal which required Tuaspring to deliver up to 70 million gallons of desalinated water per day to PUB from 2013-2038.

Furthermore, Utico has offered to hold a town hall meeting to Hyflux’s perpetual bonds and preference shares investors (PNP) that have invested $900m into the struggling firm.

The firm, which recently unveiled a $400m binding offer investment to Hyflux, said that the town hall meeting was intended for a resolution to support the Hyflux deal.

“We understand that the investors of Hyflux are the ones who will suffer the most as junior unsecured creditors and their position and support must be resolved first,” Menezes said. “We will discuss and put a solid proposal after we hear them out. It is a fact that these investors are unsecured and/or any redemption or coupon must be a win-win deal.”