SINGAPORE: Water treatment firm Hyflux said it plans to offer up to S$200 million preference shares at an issue price of S$100 a piece.
Preference shares are hybrids that have the properties of both equity and debt instruments.
They usually carry a preferential dividend, and are senior to ordinary stocks, but subordinate to bonds, in case of liquidation of the issuer.
Hyflux said the Class A Preference Shares, to be listed on the mainboard of Singapore Exchange, carry a dividend rate of 6 per cent per annum and will be cumulative, non-convertible and non-voting and also non-dilutive to existing ordinary shreholders.
The dividend, if declared, will be paid semiannually subject to certain conditions, mainboard-listed Hyflux said in a statement.
Hyflux said it has the option to increase the size of the offering to S$400 million if applications or indication of interest received exceed the offer size.
The shares could be be redeemed by Hyflux on or after April 25, 2018 at the option of Hyflux.
If they are not redeemed, the dividend rate will step up to 8 per cent per annum.
DBS Bank is the sole lead manager and bookrunner of the offer, while Stamford Law Corporation will advise the company.
Group Chief Financial Officer Mr Cho Wee Peng said the net proceeds from the issue will be used primarily to fund the water and infrastructure projects of the company.
Ms Olivia Lum, Group President & CEO said; "Hyflux currently has a number of large-scale water projects in our key markets in Singapore, China and the Middle East and North Africa."
Hyflux recently signed a 25-year water purchase agreement with state water agency PUB, for Singapore's second and the largest seawater reverse osmosis desalination plant.
Mr Choo said; "What we are looking to do is to continually source for good projects as well as to be able to deploy large amounts of capital to these projects with the ultimate aim of creating value for our shareholders."
- CNA/cc
