TIDMHYR
RNS Number : 0327U
HydroDec Group plc
31 March 2021
31 March 2021
Hydrodec Group plc
("Hydrodec", the "Company" or the "Group")
Business update
Cancellation of trading of the Company's shares on AIM
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil
re-refining group, today provides the following update:
Financing update
The Company is pleased to confirm that it has reached agreement
on a US$6.75 million (gross of fees and retentions) refinancing
package in respect of the Canton, Ohio plant and assets in order to
replace the existing equipment lease, which is over-collateralised,
and to provide additional funds for feedstock, approved capital
expenditure and growth opportunities. The Company has also reached
agreement with its existing US lender as to repayment arrangements
for the outstanding US$4.3 million loan. The funding will be drawn
down in tranches with the first tranche expected to be received by
7 April 2021.
Potential new partner in HoNA
The Company has previously announced having signed non-binding
heads of terms for a proposed joint venture (JV) in the US with an
industrial recycling company to establish a facility for the
purpose of dismantling and recycling pole and pad-mount electrical
transformers at the Canton site.
The potential JV partner has since made an offer to acquire all
of, or a controlling stake in, Hydrodec of North America (HoNA)
itself. Whilst the offer did not meet the Board's expectations as
to valuation, the parties remain in constructive discussions,
including as to the possibility of the potential partner taking a
minority stake in HoNA rather than the proposed JV structure.
The potential partner's proven access to the utilities (and used
transformer oil) combined with Hydrodec's proven ability to produce
re-usable transformer oil and generate carbon credits would be
expected to create a market-leading re-refining business in the
US.
The Company can also announce that the remaining historic
interest in HoNA that had been held by G&S has now been
transferred back to Hydrodec - as such Hydrodec is currently the
100% owner of HoNA.
Litigation of discontinued business
Following the Company's announcement on 3 February 2021
regarding the Australian court judgement which found against
Hydrodec and in favour of Southern Oil Refining (SOR), the Company
continues to evaluate its position and has lodged a notice of
intention to appeal.
Should it not pursue the appeal, or if any appeal is ultimately
unsuccessful, the Company will seek an appropriate arrangement in
respect of the settlement of the claim.
Cancellation of trading in the Company's shares on AIM
Despite having now reached agreement as to the refinancing, the
ongoing impact of the pandemic and the Company's financial
constraints have resulted in the Group being unable to conclude its
audit in respect of the 18-month period to 30 June 2020 at this
time. The Company's shares were suspended on 1 October 2020 and, in
accordance with the AIM Rules, trading in the Company's shares on
AIM will now be cancelled with effect from 1 April 2021.
Whilst there will be no formal market mechanism enabling
shareholders to buy or sell shares, t he Company currently intends
to offer a matched bargain facility and will provide further
details on its website as soon as it has been established and will
also include details when it circulates the audited accounts.
The regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply to Hydrodec. However, the Company will remain subject
to relevant UK company law and it will continue to communicate
information about the Company (including annual accounts) to its
shareholders. The Company will continue to maintain a website and
post updates on material developments, although shareholders should
be aware that there will be no obligation for the Company to
include all of the information required by the AIM Rules.
The Board notes that, in the recent past, the Company's market
capitalisation and lack of liquidity in its shares have impacted
certain of the potential advantages to having the shares admitted
to trading on AIM. Whilst the Board had not intended to cancel the
admission, it considers that it may be in the best interests of
shareholders given, inter alia, the reduction in corporate running
costs that result therefrom, noting the Company's financial
constraints.
The Board remains committed to publishing its outstanding
audited accounts at the earliest opportunity and will communicate
further with registered shareholders at that time.
For further information, please contact:
Hydrodec Group plc hydrodec@vigocomms.com
Chris Ellis, Chief Executive Officer
and Executive Chairman
Arden Partners plc (Nominated Adviser
and Broker) 0207 614 5900
Corporate Finance: Paul Shackleton
Corporate Broking: Simon Johnson
Vigo Communications (PR adviser to
Hydrodec) 020 7390 0240
Patrick d'Ancona
Chris McMahon
Charlie Neish
Notes to Editors:
Hydrodec's technology is a proven, highly efficient, oil
re-refining and chemical process principally targeted at the
multi-billion US$ market for transformer oil used by the world's
electricity industry. The global transformer oil market is
projected to reach USD 3.0 billion by 2025 from an estimated market
size of USD 2.2 billion in 2020, at a CAGR of 6.9% during the
forecast period (source: Markets and Markets). Used transformer oil
is processed with distinct competitive advantage delivered through
very high recoveries (near 100%), producing 'as new' high quality
oils at competitive cost and without environmentally harmful
emissions. The process also completely eliminates PCBs, a toxic
additive banned under international regulations.
In 2016 Hydrodec received carbon credit approval from the
American Carbon Registry ("ACR"), enabling its product to be sold
with a carbon offset and creating an incremental revenue stream.
The Group is now generating carbon offsets through the re-refining
of used transformer oil, which would otherwise ordinarily be
incinerated or disposed of in an unsustainable manner. This is a
highly distinctive feature for the Group, confirming (as far as the
Board is aware) Hydrodec as the only oil re-refining business in
the world to receive carbon credits for its output. This is a
significant endorsement of the Group's proprietary technology and
standing as a leader in its field.
Hydrodec's operating plant is located at Canton, Ohio, US.
For further information, please visit www.hydrodec.com.
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END
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