HydroDec Group plc Extension of working capital facilities (3990A)

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

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December 28, 2017 02:00 ET (07:00 GMT)