(Singapore May 13) The United Arab Emirates-based Utico FZC has submitted a binding offer to invest S$400 million in Singapore’s indebted water treatment firm Hyflux Ltd, according to a Reuters report.

Richard Menezes, the managing director of Utico FZC,said Utico had submitted a non-binding letter of intent this month to invest in the Singaporean firm. Utico would provide working capital and any urgent interim funding to Hyflux as part of the offer.

Incorporated in 2005, Utico is hailed as the largest private Utility Provider in UAE, generating and meeting the needs of power and water to an area of 300 square kilometers with a population of over 150,000.

Hyflux, once lauded as a national champion running the island country’s strategic desalination water projects, is now under a court-supervised restructuring process that could wipe out the holdings of tens of thousands of retail investors.

Reports say that Utico FZC would engage with Singapore’s water agency PUB and retail investors in Hyflux.

In March of 2018, Hyflux filed for bankruptcy protection and got an automatic 30-day moratorium. Thus, trading in all its shares and securities is suspended.

Hyflux’s founder Ms. Olivia Lum said last July: “After losing two years on the power business, the lenders became more jittery and they started to kind of not support us in other unrelated businesses… Maybank was becoming a little bit impatient with us. ”

One year later in March of 2019, Hyflux took an S$824 million impairment on Tuaspring for the period ended Sept 30 last year. It said that the huge difference from 2016, when the last valuation was done, was due to losses in the electricity market in recent years and lower projected spark spreads for the remaining concession period.

At that time, Tuaspring was unable to replace poor-performing membranes promptly, which affected the quantity and quality of water produced.

Also in March, PUB said that if the water purchase agreement is terminated, it will take control only of Tuaspring’s desalination plant, and not its power plant, which sits on the same site. PUB said the transfer would occur at zero cost to Hyflux, even though the desalination plant was expected to have negative value, based on calculations done in accordance with the WPA.