HydroDec Group plc Extension of working capital facilities (3990A)
28 December 2017 - 6:00PM
UK Regulatory
TIDMHYR
RNS Number : 3990A
HydroDec Group plc
28 December 2017
28 December 2017
Hydrodec Group plc
("Hydrodec", the "Company" or the "Group")
Extension of working capital facilities
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil
re-refining group, is pleased to announce that it has agreed an
extension to the term of its working capital facilities.
The Company benefits from the following facilities provided by
Andrew Black, a director of the Company and its largest
shareholder:
1 First facility established pursuant to a facility agreement
dated 20 October 2015 (as amended by deeds of variation dated 30
November 2015 and 11 April 2016), for a total of GBP2.15m with an
interest rate of 7% pa;
2 Second facility established pursuant to a facility agreement
dated 30 November 2015 (as amended by a deed of variation dated 11
April 2016) for a total of GBP4.25m with an interest rate of 8% pa;
and
3 Third facility established pursuant to a facility agreement
dated 11 May 2017 for a total of GBP0.5m with an interest rate of
10% pa (the "Third Facility").
All three facility agreements (as amended) provide for a
repayment date of 31 December 2017 and are secured over assets of
the Group.
As announced on 12 May 2017, the Company was provided with the
option to extend the repayment date in respect of all three
facilities to 31 December 2018 on terms acceptable to both parties.
The Company and Andrew Black have agreed that the repayment date on
the three facilities be so extended by 12 months (to 31 December
2018), with the interest rate on all three facilities aligned at
10% per annum on drawndown funds for the remaining term of the
loans. The Company has agreed to pay a one-off extension fee of 1
per cent of the total amount available under all three facilities -
the fee will be payable at the time of repayment of the principal
and accrued interest. The Company may repay all or part of the
loans prior to the final repayment date without penalty.
In addition, Andrew Black has agreed to extend the Third
Facility by GBP0.3m (to GBP0.8m) to provide the Group with
additional working capital headroom. While the Company's improved
operating and financial performance continues to produce positive
EBITDA, the Group will benefit from the additional headroom in that
it will not be required to withdraw valuable working capital from
the operations to service central corporate costs.
Related Party Transaction
Andrew Black is a non-executive director and a substantial
shareholder (as defined in the AIM Rules for Companies (AIM Rules))
of the Company. Accordingly, the agreement by Mr Black to extend
the term of the three facilities by a further 12 months and to
increase the amount available under the Third Facility to GBP0.8
million constitutes a related party transaction for the purposes of
the AIM Rules.
The Directors, with the exception of Mr Black, consider, having
consulted with the Company's Nominated Adviser, Canaccord Genuity
Limited, that the extension to the term of the three facilities and
the increase in the Third Facility are fair and reasonable insofar
as shareholders are concerned.
Commenting on the extension to, and increase in, the facilities,
Lord Moynihan, Chairman of Hydrodec, said: "The Board remain highly
appreciative of the ongoing support from our lead shareholder. With
the Group expecting to report its first ever year of positive
EBITDA for 2017, the Board looks forward to further executing on
its growth strategy in 2018 supported by the additional headroom
the increase in the facilities provide."
The Company expects to release a year-end trading update on or
around 29 January 2018.
For further information, please contact:
Hydrodec Group plc 01372 824750
Chris Ellis, Chief Executive
Canaccord Genuity (Nominated
Adviser and Broker) 020 7523 8000
Henry Fitzgerald-O'Connor
Richard Andrews
Vigo Communications (PR adviser
to Hydrodec) 020 7830 9700
Patrick d'Ancona
Chris McMahon
Notes to Editors:
Hydrodec's technology is a proven, highly efficient, oil
re-refining and chemical process initially targeted at the
multi-billion US$ market for transformer oil used by the world's
electricity industry. MarketsandMarkets forecasts that the global
transformer oil market is expected to grow from US$1.98 billion in
2015 to US$2.79 billion by 2020 at a CAGR of 7.14% from 2015 to
2020. Spent oil is currently processed at two commercial plants
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 Company's proprietary technology and
standing as a leader in its field.
Hydrodec's plants are located at Canton, Ohio, US and Bomen, New
South Wales, Australia.
Hydrodec's shares are listed on the AIM Market of the London
Stock Exchange. For further information, please visit
www.hydrodec.com.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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