SINGAPORE (May 6): Hyflux has identified Utico FZE as its next potential white knight investor which might make a capital injection of $400 million, weeks ahead of its extended debt moratorium until May 24.

Hyflux had previously mentioned it was in discussions with an unidentified suitor and had already received a non-binding letter of intent (LoI) from the other party.

See: Hyflux applies to extend debt moratorium by another three months; slapped with fresh claims of US$65 mil

See: After Hyflux fall, Singapore debt buyers scrutinise these firms

Utico is a United Arab Emirates (UAE) entity said to be the largest private full-service utility and developer in the Middle East. Its shareholders and investors include sovereign institutions of the governments of Oman, Saudi Arabia, Bahrain and Brunei.

In its filing last Friday, Hyflux says it intends to use the anticipated funding from Utico for equity and working capital purposes, as well as “possible urgent interim funding”.

The group is in the midst of active discussions with Utico’s legal and financial advisors on the terms of the latter’s investment, which will be set out in a binding term sheet for execution.

Utico is “aware of the urgency” of its ongoing restructuring, says Hyflux, adding that the entity intends to, on a win-win-basis, invest in Hyflux on the basis of preserving the group’s key entities so that they may remain intact and operational.

The funds will also be used to retain Hyflux’s current management as the company reaches an amicable deal with its creditor and investors.

The group adds that it is in concurrent discussions with “several other parties interested in investing” in its business.

Hyflux’s announcement comes a month after SM Investments (SMI) aborted its proposed $530 million deal to invest in the group.

The water treatment firm has since filed a lawsuit against SMI for allegedly repudiating its restructuring agreement, and SMI has likewise taken legal action against Hyflux claiming that it has thus far abided by the said agreement.

In the latest twist to the long-running saga, Hyflux subsidiary Tuaspring at end April received a letter of demand from Maybank over payments the bank said was due and payable.

They comprise $509.1 million drawn down under term loan facilities, a US$44.5 million ($60.7 million) cash cover for contingent liabilities as well as $28 million in payments from hedging agreements.