Nature Group PLC Strategic Partner & sale of interest in US (8246W)
November 17 2017 - 5:56AM
UK Regulatory
TIDMNGR
RNS Number : 8246W
Nature Group PLC
17 November 2017
This announcement contains inside information
NATURE GROUP PLC
("Nature Group" or the "Group" or the "Company")
Strategic Partner for US and sale of 50% interest in US
Business
Nature Group PLC (AIM:NGR), the provider of port reception
facilities and waste treatment solutions for the oil, marine and
process industries, is pleased to announce that its wholly owned
subsidiary, NG Lender LLC, has entered into an agreement to sell a
50 per cent interest in its the Group's US subsidiary, Nature
Environmental & Marine Services LLP ("NEMS"), to Ramky Enviro
North America, LLC, a member of the Ramky Group ("Ramky") (the
"Divestment").
About NEMS
NEMS is located in Corpus Christi, Texas, and operates Nature
Group's maritime waste treatment facilities along the Texas Gulf
Coast, collecting from seagoing vessels, Oil & Gas on-and
offshore, shipyards and terminals from Port Arthur to Brownsville.
During the financial year ended 31 December 2016, NEMS generated
revenues in that period of GBP3.004 million and reported a loss
before tax of GBP0.132 million.
Nature Group acquired a 100 per cent interest in NEMS in two
separate transactions in 2014 and 2016 for an aggregate
consideration of US$2.7 million. Since that time, the Group has
made significant efficiency investments to improve the overall
operation in road transport and cost saving waste treatment
equipment to avoid the use of third party facilities. In addition,
NEMS commenced operations in the port of Houston in line with the
business strategy for the US region.
About Ramky
Ramky is a large Indian Environmental Management Company with
approximately 4,500 employees and is the market leader in India for
hazardous waste management services. Nature has been working with
Ramky, which has substantial international interests, since 2015 in
a joint venture to establish a Port Reception Facility in the port
of Sohar, Oman. Ramky has expressed a firm interest in working
alongside Nature Group to develop port reception facilities in
Indian ports.
The Divestment, loan and Ongoing Strategy
The initial cash consideration for the Divestment is US$1.6
million, of which up to US$0.45 million may have to be paid back by
the Group or further interests in NEMS transferred by the Group to
Ramky (at the Group's election), if certain financial performance
targets are not achieved by NEMS in 2018 and 2019.
In connection with the transaction, both Ramky and Nature Group
have agreed to strengthen the working capital position of NEMS
through the provision of loans of US$0.2 million and $0.8 million
respectively. These loans are repayable by NEMS on the fifth
anniversary of the Divestment, with interest payable annually at a
rate of 5 per cent.
In addition, Ramky International (Singapore) Pte ltd, part of
the Ramky Group has made available to Nature Group a loan of US$0.2
million (the "Loan"). The Loan is repayable by 14 October 2018 and
no interest is payable if the Loan is repaid prior to 14 February
2018. Otherwise, interest is payable at an annual rate of 5 per
cent. for the full period for which the Loan is outstanding. The
Loan is guaranteed against Nature Group's 50 per cent. share of
Oman Maritime Waste Treatment SAOC (Corporation), the Company's
joint venture in the Port of Sohar, Oman.
The proceeds of the Divestment and the Loan will be utilised for
the Company's immediate working capital requirements and,
importantly, will significantly benefit Nature Group's current cash
position which, as previously announced, has been adversely
impacted by a number of factors, most notably the continued
performance of its Oil & Gas division in the current
challenging but improving oil price environment. Furthermore, the
net proceeds will allow the Board to implement a number of
initiatives identified as part of a detailed strategic review over
recent months and to implement a turnaround plan to achieve a
significant reduction in overhead costs and improve the performance
of the company both in terms of profitability and operational
efficiency.
In addition, with the combination of Ramky's knowledge and
experience in managing large projects in hazardous waste and
bio-medical waste and Nature's experience in the field of port
maritime waste, the Board of Nature Group believes that the
Divestment and the ongoing relationship with Ramky represent a
significant opportunity to expand Nature Group's operations in the
US and internationally.
Repayment of Loan to Director
On 5 October 2017, Nature Group announced that Andreas Drenthen,
CEO of Nature Group, had entered into a Loan Agreement with Nature
International Slop Disposal BV, a wholly owned subsidiary of the
Company (the "Director Loan"). The Company confirms that on receipt
of the cash consideration for the Divestment, the Director Loan has
been repaid in full and there are no outstanding obligations on
either party.
Berend van Straten, Chairman of Nature Group, commented:
"We are pleased to announce a strategic alliance with a world
class waste management and infrastructure group. We have a strong
working relationship with the Ramky team, and we look forward to
pursuing the further opportunities that our combined expertise can
create. The creation of shareholder value and immediate injection
of cash is welcome to fulfil our current financial obligations and
to continue to restructure our organisation and business. We are
confident that the actions the board is taking will allow us to
face the future with optimism."
For further information:
Nature Group PLC
Andreas Drenthen, CEO Tel: + 31 653261484
Berend van Straten, Chairman Tel: + 31 626805605
Cenkos Securities plc
Neil McDonald Tel: +44 (0)131 220 9771 /
+44 (0)207 397 1953
Beth McKiernan Tel: +44 (0)131 220 9778 /
+44 (0)207 397 1950
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCGGGAAGUPMGUM
(END) Dow Jones Newswires
November 17, 2017 05:56 ET (10:56 GMT)
Nature Grp (LSE:NGR)
Historical Stock Chart
From Jul 2024 to Aug 2024
Nature Grp (LSE:NGR)
Historical Stock Chart
From Aug 2023 to Aug 2024