UPDATE 1-UAE's Utico says signs deal to rescue Singapore's Hyflux

(Adds details, background)

SINGAPORE, Aug 27 (Reuters) - United Arab Emirates-based utility Utico FZC said on Tuesday it had agreed a restructuring deal with Singapore's indebted water treatment firm Hyflux Ltd , giving it 88% of the company.

Once lauded as a national champion running a strategically important water source for the city-state, Hyflux is now under a court-supervised restructuring process that could wipe out the holdings of tens of thousands of retail investors.

Utico said it agreed a deal with Hyflux on Monday, the last day before an exclusive discussion agreement ended. The financial details were not disclosed.

"The deal finds a resolution for creditors and PNP (perpetual and preference shareholders) investors and development projects that have been languishing since the moratorium in May 2018," Utico said in a statement.

"With the support of Hyflux Board and management, swift action will be taken to bring all projects up to speed as well as take on new projects."

Hyflux did not immediately respond to request for comment. (Reporting by Aradhan Aravindan and John Geddie; writing by Joe Brock; editing by Richard Pullin)