HYFLUX'S potential white knight Utico is looking to take an 88 per cent stake in the troubled water treatment firm through S$300 million in equity injection and S$100 million in shareholder's loan.
Hyflux first mentioned Utico's potential investment of S$400 million on May 3 but both parties are still working towards a binding agreement.
The United Arab Emirates-based utility also intends to offer the cash equivalent of a 4 per cent stake in the enlarged Utico group plus additional cash to holders of Hyflux's perpetual securities and preference (PNP) shareholders, both companies said in a joint update filed with the Singapore Exchange on Thursday.
They had given themselves up to June 27 to hammer out a binding agreement.
Despite missing the deadline, informal discussions had continued and "the parties are now progressing towards a deal subject to approvals from all stakeholders and definitive documents being finalised and entered into", recognising that a speedy conclusion is essential to preserving the value of Hyflux.
They intend to enter "definitive documentation in respect of the proposed investment" as soon as possible, and to hold townhall meetings for the PNP shareholders and the holders of medium-term notes "ideally before the next court hearing".
Details of Utico's offer to PNP shareholders will be announced prior to the townhall.
In May, Utico chief executive Richard Menezes had said Utico would offer "part cash redemption and also a hope for full redemption with a plan and exit option".
Under his proposal, small investors of up to S$2,000 to S$3,000 could get 50 per cent cash redemption along with full redemption opportunity while the rest of Hyflux's investors could get a similar but staggered and cascade deal.
He added that "in all cases, all investors will have an opportunity to get their money back as a plan if they support the deal", explaining that "this was offered to PNP investors and not the senior creditors".
There are about 34,000 PNP investors who invested a total of S$900 million into Hyflux.
In response to queries on whether the part cash redemption option for investors was still on the table, Hyflux said the "details of the deal for the various groups of stakeholders are being discussed and will be announced at the appropriate stage".
There have been face-to-face meetings with Utico, and both parties met representatives of various stakeholder groups on July 9 and 10 to discuss the latest proposed investment, said Hyflux.
The company previously said it was in talks with seven different parties regarding a potential cash injection and wanted to enter into a binding term sheet with one of them by mid-June.
The talks followed a failed rescue deal with Indonesia's Salim-Medco group in April.